Registration of service tax and VAT

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CMA NIRALI PARIKH (Querist)
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07 June 2011 For the business of E-Commerce if my turnover increse more then 10 lakh.nw it need to register service tax no.But for E commerce there is trading activity also there i.e pur from vendor get the order from net and supply to the custmer.if it is limiterd to gujarat only.
Nw wt is requirement?need to get registered for VAT and service tax both??
Please suggest in this case.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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08 June 2011 PERSON PROVIDING THE TAXABLE SERVICE IN EXCESS OF RS.9 LAKH PER ANNUM (BUT LESS THAN 10LAKH)WILL HAVE TO REGISTER WITH THE SERVICE TAX DEPARTMENT AS PER NOTIFICATION NO. 26/2005 SERVICE TX DATED07.06.2005.
THOUGH THEY WILL BE ELIGIBLE FOR EXEMPTION FOR TURNOVER IS LESS THAN 10 LAKHS PER ANNUM.

AS PER RULE 3(3)OF SERVICE TAX, AND PROVISION OF RULES 4(2) TO 4(7)OF SERVICE TAX RULES WILL BE APPLICABLE TO SUCH REGISTRATION.

As Per prescribed Law , Works Contracts both VAT (WC) & Service Tax are applicable on the Contract price since there involves the transfer of property in goods (sale of goods / materials) subject to VAT levied by the State Government and rendering of Taxable Service subject to Service Tax levied by the Central Government. Thus, the both the state & the Central Governments levy VAT & Service tax on the same taxable base i.e. Contract Price, respectively.
The Contracts /Taxable services where both VAT and Service Tax are applicable
are shown as under,
Construction contracts, Civil Jobs
Annual Maintenance Contracts (AMCs)
Errection of Plant and Machinery etc.
Please note that in such Works Contracts / Taxable Services, the working for levy of VAT & Service Tax is to be done, separately, as per the provisions of VAT & Service Tax. Only in the case where the Contractor opts for A-1 legal option of actual labour deduction method, he can pay Service Tax on the actual labour portion and VAT on actual Material value. Otherwise only A-2 (Standard deduction) and B (Composition Tax) options are available under VAT and No deduction for levy of Service Tax for the Contractor. The Abatements are available under the Service Tax law for specific Taxable Services towards the value of material / goods involved in the same. Like 67% Abatement from the contract value is available under the Construction Services.

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CMA NIRALI PARIKH

CMA NIRALI PARIKH (Querist)
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09 June 2011 Mr Ramesh Thank you.I have idea for construction but this case is for E-commerce in which we are doing business through internet to get order from custemer and provide the goods and that is taxable service.so there is service tax.but for VAT is also need to registered??