We are providing the services as repair & maintenance to various/different states customers covered under WCT. Contract considers the Service & replacement of Spares from our Mumbai office, please advice how we can bill & pay taxes of VAT & Service Tax our Customers in different states om monthly basis.
03 August 2025
Got it! Here’s a clear explanation for your situation about VAT & Service Tax under Works Contract Tax (WCT) for repair & maintenance services involving multiple states, with spares replacement from Mumbai: Your Situation: You provide repair & maintenance services (works contract) to customers in different states. Your contract covers service + replacement of spares. You operate from Mumbai (Maharashtra). You want to know how to bill and pay VAT & Service Tax monthly. Key Points: 1. Works Contract Tax (WCT) Applicability: WCT is a state-level tax applicable on works contracts (including repair and maintenance). Maharashtra has WCT provisions under the VAT Act. WCT applies on the entire contract value (service + materials). 2. VAT on Works Contract: VAT is generally not separately charged if you pay WCT (which is a substitute tax). You need to register for VAT/WCT in Maharashtra (your base state). If you provide services to customers outside Maharashtra, VAT/WCT provisions of the respective states will apply. You may need VAT/WCT registration in other states if you have significant business or presence there. Interstate sales of goods (spares) are subject to CST (Central Sales Tax) with C-Form for concessional rates. 3. Service Tax Applicability: Service Tax is applicable on the service portion (repair/maintenance labor) across India. Service Tax rate is generally 15% (after GST transition, but assuming pre-GST regime). Service tax registration is required in the state where the service provider is located (Mumbai). You charge Service Tax on service portion only, separate from VAT/WCT on materials. 4. How to Bill: Single composite invoice mentioning: Total contract value Service portion (on which service tax is charged) Material portion (on which VAT or CST is charged) Alternatively, two invoices: one for service (with service tax) and one for goods (with VAT/CST). 5. Tax Payment and Returns: VAT/WCT Payment: File monthly/quarterly VAT/WCT returns in Maharashtra. If registered in other states, file accordingly in those states. Service Tax Payment: File monthly Service Tax return (ST-3) for services provided. Maintain proper records of interstate supply, C-Forms, and tax paid. Important Tips: Clarify breakup of contract value between service and materials clearly in contract & invoices. Keep track of interstate sales and related documentation (waybills, C-Forms). Check if you need VAT/WCT registration in other states depending on business volume. Consult local tax advisors for state-wise WCT rules as they vary.
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