Can Service Tax and VAT be applied together

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A person is termed as Seller and VAT is applicable on him, now for the same sales of goods on which VAT is paid, can he be liable to pay Service Tax.

Replies (8)

A person is termed as Seller and VAT is applicable on him, now for the same sales of goods on which VAT is paid, can he be liable to pay Service Tax.

Can someone Comment Please . . .

No, he is not liable to pay service tax......

Dear Rishab,

If the transaction being referred to is of the nature of Works Contract, then service tax is applicable, though VAT/Sales Tax is applicable. There are certain exemptions to this. If it is a Sale of Goods, then Service Tax is not applicable. Pls elaborate on the nature of transaction.

Thanks,

Ganesh

Hi Ganesh Sir,

 

you Mention in your reply that Pls Elaborate on the nature of transctions.

Now i need to confirm if the nature of transaction is works Contract , then it is comes into Sales or Services.

As i think it Comes into Services. if i am right then the question asked  by the rishabh clearly states that there is a sale of goods it menas no service tax is applicable......

Pls Confirm.............

Hi,

I am just wondering if Rishab is referring to any specific business transaction of the nature stated by him, for which he is seeking clarification. Hence the details sought. If it is sale of goods, definitely there is no service tax.

Thanks,

Ganesh

Hi Ganesh Sir,

Need your help.

Can you tell me  when we need to charge wct & what was the procedure of charging the WCT with a suitable example like suppose u r a Contractor & wants to raise the bill to the vendor

Now the question is how the bill to be prepared or raise

Dear All,

Yes, there is a specific purpose of referring his query.

 

A Builder Sells a Flat on which as per recent amendment, MVAT is applicable @ 1% of cost of Flat. I guess w.e.f 1st April 2010. As per definition in the respective laws a Builder is referred as a Vendor (who sells flats thus liable for VAT)

 

 

 

 

 

 

Now as per recent amendment w.e.f Dt. 01-07-2010 in Service Tax Laws. Service Tax is levied @ 10% + Edu = 10.3% on 25% of Cost of Flat. Now in the Service Tax Laws a Builder is referred to as Service Provider. (Though Interim relief-Stay has been granted by the Hon’ble Bombay High Court, but still the assessment and its collections continue as per order of the Hon’ble Bombay High Court - though it is not deposited to the department)

 

 

 

 

 

Now a Builder Sells Flat suppose @ 50 Lacs. He adds 1% Vat on this amount i.e. Rs. 50,000/- and again as per service tax amendment he is required to add Service tax which amounts to Rs. 1,28,750/-

 

 

 

 

 

I found this provision conflicting that’s why I have posted the above query. Can you give your opinion on this subject i.e. how on one hand it is treated like sale of goods and the same thing is also treated as providing services?

 

 

 

 

 

 

If this example is continued, Tomorrow we may be charged VAT on Phone, Courier Bills, Professional charges charged by us & similarly Sale of goods will also be treated as providing services and service tax will be levied on that sales?

 

 

 

 

 

Can anyone offer their comments please.


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