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Either vat or service tax

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SUNIL

ACCOUTANT

126 Points Posted on 16 September 2011

Hi Friend & Seniors

A partnership firm register under Vat in Delhi. He deals in Timber i.e They provide the Tember goods to the client and charges Hire charge. (t is also a rent of equipment.) They also charges 5% vat and same deposited to the deparment.

But a question rise here timber owner provide the timber goods to the needy and charges hire. it is also a service. so service tax is applicable on timber goods not vat. kindly clear the picture why they charge vat.

Replies (1)

Hari Wadhwa

CA in Practice

196 Points Posted on 31 October 2011

Dear Mr Sunil

"Timber" is a product (goods & not a service) subject to VAT specifically mentioned under the taxable goods under the VAT law (e.g, in DVAT it is mentioned to be taxable @ 5% & in Gujrat VAT it is mentioned to be taxable @ 12.5% ) & hence is welll covered under the VAT law.

There is no part in this transaction which could be said to be a "service" within the meaning of any of the "tabulated taxable Services" as per the Finance Act, 1994.

Hence, No service tax is leviable.