I was doing the audit of a shipyard situated in goa. There I found that when the contractee of ship is billed VAT is charged on 70% of invoice value and service tax is charged on 33% of invoice value
I wanted to know how that is possible because 70+33=103
19 May 2013
this may not seem logical but this is because of Indian federal system. vat is levied by state govt. and service tax by central govt. and both govt.s charges whatever according to them is correct.. resulting access burden on assesses pocket. this will be over after GST will come into power.. but GST is still 'coming soon'....
06 July 2013
This is because the company must have adopted the composite scheme where this is allowed and accordingly you are confused. Kindly read the chapter of composite scheme.
CAclubindia
