Vat and service tax applied concurrently

Someone else asked a similar question but not the same. I bought Coffee from a shop in Delhi and they charged me service tax as well as VAT on the entire amount. The total tax came out to be 17%, so a Rs. 100 Coffee cost me Rs. 117.00.

Is that Legal? My contention is that both can be charged on the components (say may be VAT on Rs. 80 service tax on Rs. 20).

Can someone explain?

Replies (6)

Sir,

In this regard both concepts are applicable here because vat is applicable only sale of coffee and service tax is applicable only on serve the coffee in the restaurant. But both tax applicable only Hotel, Restaurant and other similar activities only.

Both methods are correct to charge taxes. If he is able to segregate amount of sales and service then he should charge VAT on sales portion and ST on service portion. If he does not segregate it, he will charge both VAT and ST on total amount by applying abetement rates.

 

In this regard service tax to be charged on service value after taken the benefit of abate value then service tax charged thereon prescribed rate and also read the Notification No. 26/2012-ST dt. 20.06.2012.

 

since no separate service cost is ascertainable.....vat and service tax will be levied on rs.100/-

Mr. Ghai just go ahead with Mr. CA Vivek Goyel. If this is same things.
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Service Tax cannot be chaged on sale of coffee at a shop unless it is a hotel, restaurant, eating mall etc. 

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