13 October 2009
I Am Doing My Business as Car Cleaning Services & 1. I am Purchasing A Car Cleaning Products From Global Company, With VAT @ 4%
2. With Same Products I am Cleaning the Cars for that i was charging Service Tax @ 10.3%
But My Query Is What Tax I have Charge Weather Its VAT @ 4% Or Service Tax 10.3%
In Some Cases is Like They are Charging 80 % OF VAT @ 4% 20 % OF Service Tax @ 10.3%
Eg: Purchase Cleaning Products 1000 VAT @ 4% 40 ---- Total 1040 ---- Sales Cleaning Service 1450 Service Tax @ 10.3% 149 ---- Total 1599
But IF I DO LIKE THE VAT DEPARTMENT ARE NOT ACCEPTING SO WHAT IS BETTER METHOD TO DO THE BILLING & TAX I HAVE CHARGE & AT WHAT IS PERCENTAGE PLEASE DO THE NEEDFUL & OBLIGE
According to me, the type of work carried out by you does not fit in to a works contract. Without quoting the definitions under the Indian Constitution or from different statutes, I would like to put it in a simple manner.
To be taxable under the category of works contract, there has to be a transfer of property in goods should take place, backed by a valid consideration.
In your case, the goods have been consumed incidental to providing the service. Hence, if we apply the dominant intention of your contracts (as laid down in BSNL SC case) the service would come first than the transfer of property in goods.
Hence, according to me, you have to purchase cleaning aids under VAT or CST and it will be consumed by me. The tax paid on these transactions will be your cost and while rendering the service you have to charge applicable service tax.
CAclubindia
