Calculation of Service Tax & VAT on software

This query is : Resolved

Shrikant (Querist)
Follow

30 September 2009 Now as per finace act 2009 the VAT & service tax should be charge on selling software. so could you please confirm which formulla / option amongs the following need to follow?

Option 1-

Basic Price (+)Service Tax of basic price + VAT on Total basic price

OR

Option 2-

Basic Price (+)Service Tax on basic price = Total (with service tax )+ VAT on Total price (sales amount after adding service tax figure in it)

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
Follow

01 October 2009 You choose composite tax under both the acts to reduce the tax burden.

If you want to charge at the normal rates then you have to break the value in service component and trade component then charge tax accordingly.