Service Tax & VAT on Services

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Davison Mathew

Accounatnt

43 Points Posted on 20 October 2008

Hi all,

Anybody advice on:

1) whether both Service Tax & VAT can be applied in a single transaction??

2) While we download IT software via internet from vendor in abroad, is it necessary to deposit service tax on such download by the receipient (the person who down load the software being an organizatio) of the service ?

Thanks & Regards

Davison Mathew

Replies (3)

RICHA SHARMA

129 Points Posted on 20 October 2008

yes, it is possible that service tax and vat is payable on the same transaction exampled work contract services

if you import any services like IT software via internet it will be treated as import of services and you will be liable to pay service tax as in the case of import of service iservice receiver is lialble to pay service tax on behalf of service provider.

bye

Kameswar

Employed-TCS Ltd.

22 Points Posted on 05 November 2008

Dear Richa,

Please share examples if any other than works contract services

inder jain

Tax Author

35 Points Posted on 16 November 2008

There can be no doubt that the scope of VAT & Service Tax are entirely different propositions. Therefore, both VAT & Service Tax cannot be imposed on the same transaction. Either the transaction would be sales or service. However like work contract, a certain percentage i.e. 67% of the contract value is sales and chargeable under VAT whereas 33% of the contract value is service and chargeable to service tax. It is not possible that the entire value of work contract can be taxed simultaneously under both the Acts.