HI, To all experts,
I have a complicated issue which needs your advice.
I run a service center where we Take AMC from clients for their Electronic Goods. As per the AMC terms I have to provide them Heaters / Filters free of cost 1ce a year (amc includs the cost of filters too) along with Free services for repairs & Services.
My work includes 2 aspects - 1) clients with AMC 2) Random clients
For Random clients we sell the spares and pay the vat to the department against the Purchases made.
Complication arises for AMC clients -
1) Say I am charging them Rs. 1000 as AMC charges - Service tax @ 12.36% charged.
In the above Rs.1000 spares worth 800/- MRP are provided free of cost once a year (since Free No invoce or VAT bill prepared)
Since I am not preparing Sales invoice How do i account for VAT on the spares provided free of cost??
since i do not prepare SALE invoices my Purchase VAT exceeds my sales VAT at times and comes as Refund but the stocks are not there since they are given free of cost...
So I am confused as to how to deal with service Tax & VAT for the same... I cannot charge double taxation i.e. also charge service tax and also charge vat on the products.
appreciate your advice on urgent basis.
Thanking you
Ketan
CAclubindia
