St and vat on customized software

E.KALAIKOVAN (Sr. Accounts Manager ) (339 Points)

03 April 2015  

A software was purchaed one year back. Now the user want to modify and new forms in that software. The software company charged 2,50,000 for that work. That company Charged Service Tax and VAT both on the entire value of the invoice.

Service Tax 12.36% on 2,50,000/-

VAT/CST 5.61% on 2,50,000/-

Doubt : If ST is charged on the entire value, then VAT/CST should be nil?