VAT applicable on AMC contract

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2010 We are registered for VAT in Maharashtra, We provide Broadcast (Television) related equipments services and maintenance. We do have AMC contract with vendors.
Can I know the rate of VAT applicable on total value for the AMC contract issued to us by Doordarshan through a Global advertised tender for AMC.
Do We need to register under works contract to undertake the AMC contract. We have VAT registration in Maharashtra
Thanks & Regards

ca dipti sharma

ca dipti sharma (Expert)
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07 April 2010 Vat is charged only on Goods, but in your case, as you mentioned that you are the provider of broadcast related equipment service & maintenance, i dont think so vat should be charged on this service

Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2010 Thanks Dipti but I beleive there is new regulation to charge VAT on Annual Maintanance Contracts

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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20 April 2010 Sorry-dipti, I am not agreeing with you on this issue. If the transfer of property in goods is being made in course of execution of Works Contract, the said works contract become the subject matter of VAT/CST. If the contract is divisible, VAT/CST will be directly applied on the vlue charged for materials. If the contract is indivisible, taxable value of the turnover will be calculated as oper rules laid down in State Act. At this point, I should mention that power of providing fixed method of calculation of taxable turnover was given to Parliament of India. Being the power is not yet excerised, state legislatures are formulating the same as per direction given by the Constitution bench of the Apex Court in Gannon Dunkerley's xcase-1993.

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