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Service tax & vat on software licenses

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This query is : Resolved

pradeep (Querist)
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22 August 2013 Our company is pur chasing software from microsoft through dealer HCL. they are billing both service tax and VAT.
My query is
1. since service tax is applicable due to dealing between OEM and HCL and HCL is liable as service recepient, why our company at all should pay servicer tax on gross contractual value.
2.VAT i understand is applicable as licenses in physical form received
3. can our company pay the differential service tax ie. differcne between service tax claimed by HCL and service tax actually paid by HCL as service recepient

CA Suresh Jain

CA Suresh Jain (Expert)
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22 August 2013 HCL is charging the service tax correctly. You can not just pay the differential service tax,You need to take CENVAT Credit, raise the invoice with full service tax and utilise the CENVAT credit for payment your service tax liability

disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case

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