Service tax and VAT Gross up

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RAMESH

Expert

52 Points Posted on 03 September 2010

Dear Friends,

We are service provider under construction of services and opted composition scheme in Service tax and VAT payment. I have a query on how to calculate the back calculations to arrive the taxable value for Service tax and VAT.

Net amount received from customer(which includes vat and service tax) : Rs.1,00,000/-

What is taxable value for Service tax payment?

What is taxable value for VAT payment?

Please give example ...

Thanks & Regards

Ramesh

Replies (4)

Kumar Gaurav

Going...to be C.A soon...

1055 Points Posted on 03 September 2010

u can calculate the amount by using this:

Net amount*100/Rate of tax+100

ie: 100000*100/110.3=90,662/- is the taxable value of services

and 9338/- is service tax amount which u need to be deposited by the due date.

Correct me if i m wrong plz!

RAMESH

Expert

52 Points Posted on 03 September 2010

Please confirm any one which is correct calculation.

Option 1
Back calculation for payment of Service Tax
Net Receipt	100000
Which includes 2.575% of Service tax and 1% Vat	96548.39

Basic Value	96548.39
Abetment 75%	72411.3
Taxable Value	24137.1
Tax @ 10.3%	2486.121



Back calculation for payment of VAT
Net Receipt	100000
Which includes 2.575% of Service tax and 1% Vat	96548.39

Basic Value	96548.39
Abetment 75%	72411.3
Taxable Value	24137.1
Tax @ 4%	965.4839


Option 2
Back calculation for payment of Service Tax
Net Receipt	100000
Which includes 2.575% of Service	97489.64

Basic Value	97489.64
Abetment 75%	73117.23
Taxable Value	24372.41
Tax @ 10.3%	2510.358



Back calculation for payment of VAT
Net Receipt	100000
Which includes 1% Vat	99009.9

Basic Value	99009.9
Abetment 75%	74257.43
Taxable Value	24752.48
Tax @ 4%	990.099



Option 3
Back calculation for payment of Service Tax
Net Recept	96524
Abetment 75%	72393.3
Taxable Amt - Bal 25%	24131
Service Tax @ 10.3%	2486
Taxable Value for VAT	99010
Vat 1% on Gross Value	990
Gross Receipt	100000