Vat + service tax invoice

4456 views 6 replies

Harinder

student

219 Points Posted on 10 July 2013

Dear All; Our's is a manufacturing company. As per Clients requirements we arrange raw materials and put our labour / service to achieve the requisite product. My point of concern is, If we have arrange raw material, carry out modifications, engage our labour, which Invoice do we need to raise to the Clients. We are putting Raw Material means VAT / CST has to be applied but at the same time we are putting our labour which attracts Service Tax... Should I raise an Invoice where, I will be mention the Raw Material purchased + VAT to be charged and then Labour cost + Service Tax. Collaborating both activities and taxes in one single Invoice... Is this legally valid??? Please advice... Thanks in advance.

Replies (6)

CA vinod

Chartered Accountant

518 Points Posted on 10 July 2013

If you manufacture some product based on the client requirement using rawmaterial and labour, excise duty may be applicable. If any process amounts to manufacture there is no service tax liability. Only excise & VAT will applicable.

Harinder

student

219 Points Posted on 10 July 2013

Thanks for reply Sir. Sir, As per my knowledge Our product is exempt from Excise. Then, what should be the proper way to raise an Invoice...

Originally posted by : CA vinod
	If you manufacture some product based on the client requirement using rawmaterial and labour, excise duty may be applicable. If any process amounts to manufacture there is no service tax liability. Only excise & VAT will applicable.

Rashid Imam

Officer (Indirect taxation)

296 Points Posted on 12 July 2013

If you are a work contractor then service tax will be levied on Labour and Vat on Material (other than composite dealer under Vat act), But if you are manufacturur of those good service tax not applicable, Excise and Vat will applicable, or if you product is exumpted from Excise duty, only VAT is applicable in such condition.