Hi My company is providing AMC Comprehensive contract oh Gym Equipments Machines i need to know the tax structure for comprehensive contracts as per act suppose a contract value is 100000/- so i m charging sales tax 12.5% WCT on 60% and on 40% of contract value service tax @ 10.30% am i correct because as per sales tax 40% deduction is allowed as labour charges but under service tax i m confused can you please guide me on this if possible please give some section or notification.
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Comprehensive contract
Replies (5)
As there are no explicit provisions under the FA, 1994 i.r.o AMC contracts, we may take the shelter under N. No.12/2003-ST according to which the value of materials on which VAT/WCT was paid can be excluded from gross amount and balance representing value of service on which service tax can be paid @ 10.3%. The abatement being followed presently by you is as per VAT but not as per ST which will lead to complications. Hence, best recourse is N. No.12/2003-ST.
CA. C V SURYAM
Mob: 9177171123 / 9848180210
As there are no explicit provisions under the FA, 1994 i.r.o AMC contracts, we may take the shelter under N. No.12/2003-ST according to which the value of materials on which VAT/WCT was paid can be excluded from gross amount and balance representing value of service on which service tax can be paid @ 10.3%. The abatement being followed presently by you is as per VAT but not as per ST which will lead to complications. Hence, best recourse is N. No.12/2003-ST.
CA. C V SURYAM
Mob: 9177171123 / 9848180210
Hyderabad
As there are no explicit provisions under the FA, 1994 i.r.o AMC contracts, we may take the shelter under N. No.12/2003-ST according to which the value of materials on which VAT/WCT was paid can be excluded from gross amount and balance representing value of service on which service tax can be paid @ 10.3%. The abatement being followed presently by you is as per VAT but not as per ST which will lead to complications. Hence, best recourse is N. No.12/2003-ST.
CA. C V SURYAM
Mob: 9177171123 / 9848180210
Hyderabad
The service falls under " Management , Maintenance and repair." There is no specific abatement for this service. Howver, benefit of notification no.12/2003 can be taken . ie value of goods sold in the course of providing service can be excluded provided you have support documents to prove trhis.
thanks a lot for the replies which helped me lot but since i am charging serivce tax on 40% and if in contract suppose machine parts replaced in comprehensive contract is upto 30% because machine was not used that frequently then in that case can there be a problem with service tax or you suggest to charge service tax full on 100% contract value or charging servicce tax @ 10.30% on 40% of contract value and sales tax @ 12.5% on 60% contarct value is advisable because i have to convince my customer too.
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