service tax
This query is : Resolved
24 June 2010
in software product some vendore charge VAT on service tax is it correct..
suposs base valu Rs. 100/- service tax is 10.3 , in this case VAT charge Rs. 110.30 is it correct calculation pls advise..
suposs base valu Rs. 100/- service tax is 10.3 , in this case VAT charge Rs. 110.30 is it correct calculation pls advise..
24 June 2010
Service tax is on Service charge, and Vat imposed only on sale of goods.
So when you are purchasing Software, They can charge Vat on the Software only and servicetax only on service portion involved in the entire software sales.
However, Service Tax on taxable Services can be levied if an invoice doesnot segregates different amount involved in Service provided in relation to sale of software.
So in that case you may pay both on the invoice.
Ask your vendor to segregate the invoice so that you both will get benefit.
So when you are purchasing Software, They can charge Vat on the Software only and servicetax only on service portion involved in the entire software sales.
However, Service Tax on taxable Services can be levied if an invoice doesnot segregates different amount involved in Service provided in relation to sale of software.
So in that case you may pay both on the invoice.
Ask your vendor to segregate the invoice so that you both will get benefit.
CMA Ramesh Krishnan
(Expert)
24 June 2010
Incase Software purchase both taxes applicable. First Service tax and vat is on Value and ST
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