my query is, Whether Vat is imposed on the portion of Service Tax under Works Contract.
Please send me if there is any notification relating to this matter.
1 Replies
MJ Krishnamurthy
(ACCT(Retd))
(7197 Points)
Replied 03 January 2014
VAT is not charged on the services/labour part,if proper acounts are maintained and declared in the returns. Without maintaining correct accounts or,as routine way,some dealers take the permitted ratios for calculations. That is: while reporting in vat returns a ratio of 70:30 ration of material and labour is taken and for service tax 60:40 ratio of the same are assumed. In such a situation around 10% of services value may get taxed under VAT.......mjk
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