Vat on services

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prakash (Querist)

27 June 2013 we have taken an xerox machine on rent , the vendor charge the bill according to the meter reading , all other expenses like paper , repairing , refilling bear by him , et the end of month he issue a tax invoice with the content :- monthly rent of machine +charges according to meter reading + vat @ 5% let me know whether he can charge vat in this case ...???

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

27 June 2013 Yes, VAT apply since it is work contract nature. both material (paper,cartridge) and labour service involved

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prakash

prakash (Querist)

28 June 2013 dear CMA Ramesh Krishan , thanks for ur reply . but still I am in a dilemma that as I ask in my query he is charging a monthly rental of rs 2000, + charges according to meter reading ,

so in which amount vat would be charge
1)- only meter reading charges ??
2)- rent +meter reading charges ???

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

28 June 2013 It is nature of work contract which cannot segregate the material and labour. because rent is basically charged on per copy basis.so VAT apply on total bill

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prakash

prakash (Querist)

29 June 2013 sir again i am thankful to u ,.. but wt about service tax ? I think he is providing services to us , and work contract also come under partial reverse charge concept ?
need ur precious comments on it
thanks in advance

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

29 June 2013 VAT and service tax both are different directions. ofcourse in the VAT covers under WCT then service tax also may covered under Work contract service, but the service provider under which category he is registered need to be checked, some time pure repairs & maintenance also will cover this nature of service

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