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Applicability of wct and service tax

vijeesh V R (CA Final) (91 Points)

04 May 2012

We are doing Annual Maintenance contract (comprehensive) for clients.ie,including material,whether we have to charge both WCT and Service tax on the Amc Value.?

What is the Basis of charging?

pls clarify

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7 Replies

MJ Krishnamurthy (ACCT(Retd)) (7197 Points)
Replied 04 May 2012

Mr Vijeesh,

For the value of spare parts used in AMCs WCT tax has to be paid. This value can be ascertained from the bills if they are mentioned clearly in the bills.VAT also can be collected on those amounts of spareparts.If consolidated billing is done the value of material used is to be estimated from the purchase price and adding profit to it. In put tax credit is also available. If any consumables are used their cost is to be clubbed with labour only......MJK

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vijeesh V R (CA Final) (91 Points)
Replied 08 May 2012

thank you sir

That means we have to charge either WCT or VAT on the Material value and service tax on labour portion.

MJ Krishnamurthy (ACCT(Retd)) (7197 Points)
Replied 08 May 2012

Mr Vijesh,

You are right.......MJK

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vandanaharidas (cost accountant) (38 Points)
Replied 27 July 2012

is wct is applicable for contract for painting the floor. what will be the difference if labour & goods for contract is supplied by contractor and not supplied by the contractor .andalso in thacase where goods supplied by contractor and labour engaged by contractee and wise verse.

MJ Krishnamurthy (ACCT(Retd)) (7197 Points)
Replied 27 July 2012

Mr Vandanaharidas,

Painting of any surface,whether wall,floor,furniture,grill etc is a work contract,If you provide the paint and do the painting work as well,then it is full contract,While billing you have to charge VAT on the cost of paint consumed+ your profit and ST on labour expenses+ your profit.If the contractee supplies the required material(paint) and you engage labour to do the work,then it becomes only a job work or labour contract. In your bills there will be no material cost,so, no VAT. But you have to collect ST.If you supply the paint and the owner arranges labour to do painting then it is only a normal sale and VAT is applicable.In case your have opted for composition under VAT and ST also ,then, 4% on the whole bill amount for each of the the taxes,(i.e. double). Going by normal method 14% on the material and 12.36% on the labour and services parts....MJK

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P R SHRIVASTAVA (accountant) (22 Points)
Replied 20 May 2014

Dear Sir, we are planning to take an AMC(Comprehensive Basis). Vendor has sent his quotation, in that quotation there is a doubt, please clarify,

In the given Quotation, There is a Gross Bill Amount.

After that he adds a 12.36 @ 70% Service Tax

Then after adding of Service Tax and Gross Bill , he is charging VAT @ 8%. Now the my doubt whetyher is there any rules or circular or notification that explain that the VAT will be charged on Gross Bill + Service Tax, He has given me a some Notification, No.32/2007, Dated:22.05.2007 & 35/2012, Dated:20.06.2012.

Now my second question shall I deduct WCT TDS on it or not.

Please reply as it is required urgently.

GURU PSD NAUDIYAL (Taxation) (22 Points)
Replied 28 May 2016

Dear Sir, we are planning to take an AMC(Comprehensive Basis). Vendor has sent his quotation, in that quotation there is a doubt, please clarify, In the given Quotation, There is a Gross Bill Amount. After that he adds a 14.50 @ 70% Service Tax Then after adding of Service Tax and Gross Bill , he is charging VAT @ 5.25%. Now the my doubt whether is there any rules or circular or notification that explain that the VAT will be charged on Gross Bill + Service Tax, He has given me a some Notification, No.32/2007, Dated:22.05.2007 & 35/2012, Dated:20.06.2012. Now my second question shall I deduct WCT on it or not. Please reply as it is required urgently.