01 June 2010
One of my claint received a purchase order from Hindustan shipyard for supply of machinery along with machinery maintenance and technical support. Our claint raised a TAX INVOICE to Hindustan Shipyard and the same was produced before the VAT department for paying the VAT. My claint given maintenance part and technical part to the sub-contract. Against this matter service tax department raisesd a point that, your have given maintenance and technical part to the sub-contract. In your books of account all the sub-contract relatable to service. So your sale biil is also included service part.Then you have to pay service tax, this is the department opinion. KIndly clarify
01 June 2010
VAT is applicable on sale only not on maintanance contract. There should be a separate identifiable price for maintanance in the supply contract. Thus the amount pertaining to maintanance and technical support is subject to service tax under the category "maintenance and repair services". There is no need to pay service tax by the subcontractor, if the main contractor pays service tax on maintenance work.
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