19 August 2010
We manufacture and sell UPS and after warranty period we offer AMC to our customers.
We recieve 100% advance payment for AMC and we raise invoice in the beginning of AMC tenure
On basis of previous experience we have concluded that 30% of the AMC value will be material and 70% of the AMC value will be Service charges, hence we raise invoice with 30% component value(Sales tax) and 70% Service value (Sales tax). This is how we have been following and paying sales tax and service tax
Now Sales tax officials are claiming 75% value for sales tax and 25% (Labour) value for Service tax as per Works contract
They are saying irrespective of paying Service tax what we have already paid, they are claiming sales tax.
CAclubindia
