AMC Service

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Debashis Mandal (Querist)
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26 December 2010 Respected Experts
If an assessee providing AMC services for electronic appliances & the contract with the customer is with spareparts, so if any parts is needed that is to be paid by the service provided & not by the customer - so in that case VAT cannot be charged on such spare parts to the customer - now the question is whether service tax is to be charged on total AMC contract price or a portion of AMC contact price will attract service tax.
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Debashis Mandal

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27 December 2010 On AMC, service tax is to be charged on gross value excluding value of goods sold. In your case, value of goods which will be used in AMC is not known and therefore, it cannot be said that you have sold the goods to exclude the same from service tax. You may end up paying service tax on full AMC and VAT on sale value of goods.

A tax consultant may advise and re-structure the transaction to mitigate double taxation.