Maintenance of Repair and Service

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

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.

Kindly help

-Accountant

CA PRAMOD SARAOGI

CA PRAMOD SARAOGI (Expert)
Follow

19 August 2010 Payment of service Tax is not the criteria for assessing the liability of sales Tax.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

21 August 2010 Sir,
Thanks very much for your reply.

You could have understood the problem we are in, despite being honest in paying taxes.

Now, do we have any defence in this case or just we have to accept the dictate of sales tax

If, that being the case can we claim excess service tax refund for last four years

Upgrade to CAclubindia Pro. Subscribe Now!

Gagan Agarwal

Gagan Agarwal (Expert)
Follow

31 August 2010 which state vat law are you referring to?

need to check the state vat law and then only can comment on whether the sales tax authorities are right in their contention.

Regarding service tax, is the value of material indicated in the contract? whether the value of material is clearly bifurcated in the invoice?

need anwers to these queries then only can we proceed

Message likes : 1 times