27 February 2015
Dear expert. my client is contractor. who does provide air conditioner repair service. and my client is also registered in Service tax.
my following Query is above mention...
suppose mr. A my client and mr. B pvt. ltd. company, mr. B has given a contract to Mr. A of Rs 1100000/- for repairing air conditioner included material
and mr. A has completed the contract in that 900000 was materials portion and 200000 was service portion. but my client has made huge mistake he has used his materials rs 900000 which was 14% taxable but my client did not charged 14% vat on materials portion. he has send the bill of rs total 1100000/- to Mr. B and mr. B has deducted 2% TDS as per section 194C on 1100000/- and mr. B has shown total 1100000 in his tds statement. but now will this total 1100000/- be consider as service portion or not for mr. A because mr. A is registered in ST. plz guide me.
27 February 2015
Your question is not very clear. But still if I assume that you want to ask that even when sales of spares (where vat is already applied) has been subjected to TDS u/s 194C whether service value becomes Rs. 11 lacs or not.
I don't think so. Sales is separate to service both can be accordingly accounted and taxes. However full TDS credit of 194C can be claimed by the payee service provider.
CAclubindia
