Vat and service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 January 2017 Hello Sir,
We are an advertising agency. We do designing and printing work. For designing and printing we charge service tax @ 15%. For this designing we use material. For the material we use we charge VAt @ 6%. Combining both the taxes it comes to 21%. In construction co. there is a provision in which taxes is charged at lower rate ie 16% to 17%. Is there any provision as such for advertising agency where we can charged combine tax at a lower rate.

CA Suresh Jain

CA Suresh Jain (Expert)
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14 January 2017 As per rule 2A (i) (c) where VAT is paid or payable on the actual value of the property in goods transferred in execution of works contract, the value adopted for payment of VAT is to be excluded from the value to arrive at value on which service tax is to be paid.