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VAT on service tax

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This query is : Resolved

Kinjal Thakkar (Querist)

22 September 2008 A company deals in computer and related parts. It also provides AMC and services to its clients. On AMC bills they charge 12.36 service tax on basic AMC amount. Thereafter should they levy VAT on basic and service tax amount. The company is not under composition scheme. What difference it will make if it was under that scheme

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)

27 September 2008 In principal VAT is chargeable on the value of Materials which are transfered to the contractee through execution of WC. Hence VAT can not be levied on Service Tax.
However in case the delaer is under composite scheme and opted for a alternative method of calculating VAT liability and if the scheme is calculating VAT on the entire amount received or receivable, than VAT at prescribed rate can be charged on the entire amount.
Please mind it that the laws very from State to State.

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