Dear Experts,
We are regsitered Vat dealer in Karnataka, providing telecom equipments services and maintenance. We do have AMC contract with vendor.
Can I know the rate of VAT on the material involved in the AMC contract.
Do We need to register under works contract to undertake the AMC contract. We are vat register dealer for Telecom equipements in karnataka
Thanks & Regards
Umesh
Your present registration is sufficient for the VAT compliance.
You can opt for composition scheme for the whole year where the rate would be 4% of the gross amount. No deduction for materials wouldbe admissible. You can charge the same to the cusomter also. Where the value of materials transferred is lower this option maybe preferable.
Second option is to go for payment of VAT on 75% of the value and avail the deduction on the materials used for AMC. This maybe preferable where the cusotmer is availing set off + where materials costs are high. In such contracts the fact that the VAT would be charged on 75% of the value under regular cheme at the rate of 12.5% should be made clear in the offer/ PO.
One mroe option is to deduct the actual labour which is quite cumbersome and may require proving.
CAclubindia
