Facts of the Case - We are a construction company operating in Maharashtra. For VAT we had opted for composition scheme. In VAT assessment , Assessing Officer is asking for VAT on Service Tax portion also.
E.g.
Our Invoice
|
Basic Amount |
100 |
|
Add – VAT @ 5% on 100 |
5 |
|
Add – Service Tax @ 4.12% on 100 |
4.12 |
|
Gross Amount |
109.12 |
Invoice – As per Assessing Officer Stand
|
|
|
|
Basic Amount |
100 |
|
Add – VAT @ 5% on 100 |
5 |
|
Add – Service Tax @ 4.12% on 100 |
4.12 |
|
Add- VAT on Service Tax – 5% on 4.12 |
0.206 |
|
Gross Amount |
109.326 |
Our stand is ,
1. We are showing Service tax & VAT separately in Invoice.
2. Service tax is not an expenses for us but it is recovery of tax on behalf of Government. So the question of adding it in sale price should not arise.
3. VAT is on transferring the property in Material involved in works contract, However Service tax is on Labour portion. So it should not form part of sale price for calculating VAT.
Que –
1. Whether it is justifiable to charge Tax on Tax, i.e. VAT on Service Tax.
2. Whether the stand taken by Assessing Officer to charge VAT on Service tax is Correct? , with reason.
3. Whether there will be any impact if Contract is inclusive of all taxes & Contract excluding taxes.
4. Whether VAT is payable on “ Service tax paid on Free Supply of Material also”
5. Any other opinion in this regard
Thanks in Advance
CAclubindia
