Service tax with vat

This query is : Resolved 

22 August 2008 Dear Friends,

My Client is a Software Seller, they buy and sell softwares to colleges and institutions, now their suppliers started charging service tax as well as vat?
how should we charge our customers,

Method 1

Price = XXX
Service tax @12.36%
on XXXX = YYY
Vat on (XXX+YYY) = ZZZ
Bill Amount(XXX+YYY+ZZZ)= $$$

or Method 2

Price = XXX
Service tax @12.36%
on XXXX = YYY
Vat on (XXX) = ZZZ
Bill Amount(XXX+YYY+ZZZ)= $$$

or Method 3

Price = XXX
Vat @ 4%on (XXX) = YYY
Service Tax @12.36%on(XXX) = ZZZ
Bill Amount(XXX+YYY+ZZZ) = $$$


Please Help Me in This Case Many Suppliers Charges in Different Methods Method is been observed in many suppliers Invoices Which is Correct Method For Calculation

22 August 2008 Previously This Question is Been posted on 18/07/2008 but yet received no Reply

thus it is posted again.. somebody solve this

with some notification or circulars .. with any other proofs to justify your answer

22 August 2008 please reply as soon as possible

03 September 2008 Method 3 is correct and service tax will be payable on only gross amount of services and same is with VAT


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