Vat or Service Tax
This query is : Resolved
11 February 2010
Our Co. Purchase a software of Rs. 200000/- for Inventory Management & updagrate it for 1 year & pay Rs. 18000/- in same month
Party Raised bill as follows:
Software (Ver.XXX) : 200000
Software Update for : 18000
1 Year
Vat @4% on 218000 & Service Tax 10.30% on 218000
Is this correct?
Pl tell me....
Party Raised bill as follows:
Software (Ver.XXX) : 200000
Software Update for : 18000
1 Year
Vat @4% on 218000 & Service Tax 10.30% on 218000
Is this correct?
Pl tell me....
11 February 2010
In my Opinion, In the given case, the contact is divisible and separate amount is given for the purchase of software and the service provided for its upgradation. Based on this, Purchase of Software should be charged to sales tax and services provided are liable for Service Tax.
In No way, the total amount is charged with both service tax and VAT.
Reference can be taken from the case law, in which it is stated that Service Tax and VAT are mutually exclusive i.e both can not be levied together.
Payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It was, therefore, difficult to hold that in a case of instant nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, thus, appeared to be correct. [Para 28]
Link for the case law > https://www.taxguru.in/mvat/payments-of-service-tax-as-also-vat-are-mutually-exclusive.html
Experts views are solicited.
In No way, the total amount is charged with both service tax and VAT.
Reference can be taken from the case law, in which it is stated that Service Tax and VAT are mutually exclusive i.e both can not be levied together.
Payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It was, therefore, difficult to hold that in a case of instant nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, thus, appeared to be correct. [Para 28]
Link for the case law > https://www.taxguru.in/mvat/payments-of-service-tax-as-also-vat-are-mutually-exclusive.html
Experts views are solicited.
11 February 2010
In my Opinion, In the given case, the contact is divisible and separate amount is given for the purchase of software and the service provided for its upgradation. Based on this, Purchase of Software should be charged to sales tax and services provided are liable for Service Tax.
In No way, the total amount is charged with both service tax and VAT.
Reference can be taken from the case law, in which it is stated that Service Tax and VAT are mutually exclusive i.e both can not be levied together.
Payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It was, therefore, difficult to hold that in a case of instant nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, thus, appeared to be correct. [Para 28]
Link for the case law > https://www.taxguru.in/mvat/payments-of-service-tax-as-also-vat-are-mutually-exclusive.html
Experts views are solicited.
In No way, the total amount is charged with both service tax and VAT.
Reference can be taken from the case law, in which it is stated that Service Tax and VAT are mutually exclusive i.e both can not be levied together.
Payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It was, therefore, difficult to hold that in a case of instant nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, thus, appeared to be correct. [Para 28]
Link for the case law > https://www.taxguru.in/mvat/payments-of-service-tax-as-also-vat-are-mutually-exclusive.html
Experts views are solicited.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS 194-T applicability
- GST ITC REVERSE
- Fixe term employment
- Is any professional CA is here please reply
- TDS on TRUST
- RCM ISSUE ON RENT AND TRANSPORTATION CHARGES
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Reprocessing of rectification order AY 2025-26
- Section 50-fixed asset-->building ceases to exist
- Putting a heading on received mail
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
