Dual Tax clarificaton-KVAT & Service Tax

This query is : Resolved

suneel (Querist)
Follow

01 July 2010 Dear Sir,

One of our service provider supplied a software and service for one year support. He invoiced with 10.3% service tax on basic value and collecting Karnataka VAT output tax 5% (which includes basic value and 10.3% service tax amount also). Is both taxes are applicable on single component and 5% WCT is applicable on both basic value and service tax?. Kindly clarify the above issue.

Thanking you in advance.
Suneel

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
Follow

01 July 2010 Software is treated as a produt therefore under kvat 5% is charged. Further the final price of the product for the first time of sale will be arrived at after adding the service content in it which will suffer service tax. Therefore you have to pay vat on both basic value + service value and service tax.

Message likes : 1 times