Charging maha vat on cost

This query is : Resolved

Lijo Philip (Querist)
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15 September 2012 Sir / Madam,

Kindly suggest regarding the following transaction:-

If I purchase a software with licenses from XYZ ltd. and the Purchase Order I will issue bears Service Tax & Maha VAT. Please suggest if the cost of purchase is Rs. 100, then Maha VAT @ 5% will be chargeable on Rs.100 or Rs.100 + Service Tax.

In second case will create cascading of taxes ?

Regards,

Guest

Guest (Expert)

15 September 2012 In this case people normally charge VAT & Service Tax on cost i.e Rs. 100/-