Vat & service tax

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Ananth (Querist)
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05 April 2012 Dear All,
our company has a contract with X company for Printer Maintenance & Repair services.The printer & pages are ours & only the toner & service is provided by them
We receive the invoice ones in a month. They are charging us on the basis of Number of copies used. Here they are charging both VAT & SERVICE TAX.

Is this acceptable?
If yes, on what basis they are charging that?

Please explain.

Tushar Desai

Tushar Desai (Expert)
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05 April 2012 They are providing you
1. Toner --> VAT Applicable

2. Repair Services --> Service Tax Applicable

So, Kindly check your invoice. VAT is applicable only on Toner Purchase (Not on Services Amount), and ST is applicable only on Services Amount (Not on Toner Amount)

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Ananth

Ananth (Querist)
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05 April 2012 Thanks Thushar,
But as i told earlier they are charging us on the basis of number of copies used & not on the cost of toner or service.

In invoice i notice that they have charges ST on 100% of the value & VAT on 75% of the value.
How is this possible?

Tushar Desai

Tushar Desai (Expert)
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05 April 2012 The matter needs to be scrutinized. I am amazed by what you have said. I advice you to ask for clarification from your supplier. Just tell him in a polite tone that what he is doing is incorrect, & tell him the correct manner of Taxation. Let's see what comes out.

Tushar Desai

Tushar Desai (Expert)
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05 April 2012 if you have other alternatives, you may talk aggressively, otherwise else pls wait for his reply.

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