Levy of vat on service tax

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.

Replies (1)

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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