Service tax & vat

Dear Sajith,

As per Section 65 (105) (zo) of Finance Act, 1994 said, any service provided or to be provided to any person, by an authorised service station, in relation to any service, repair, reconditioning or restoration of motor cars, light motor vehicles or two wheeled motor vehicle in any manner is taxable services.

"Authorized Service Station" means any service station or centre, authorized by any motor vehicle manufacturer, to carry out any service, repair, reconditioning or restoration of any motor car, light motor vehicles or two wheeled motor vehicles manufactured by such manufacturer;

The authorized service station service is taxable no specific exemption is providing either in Negative List or Mega Exemption.

Refer Notification No: 33/2012-ST dated 20.06.2012  Authorised Service Stations are providing services under the brand name of other, they are barred small service provider exemption of Rs.10 lacs.

So the gross amount received against provision of service is the value of service.

The Explanation (c) to Rule 2A(i) of the Valuation Rules states that where VAT or sales tax is paid or payable on the actual value of property transferred in execution of Works contract then such value adopted for the purposes iof payment of VAT shall be taken for the execution of the works contract, for determining the value of service portion in the execution of works contract service. 

so my opinion Service Tax applicable to where VAT paid or payable on the actual value of property transferred in execution of Works contract.