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Can vat & service tax both charged on single bill???

08 March 2013

Dear All

i want to know that if an caterers provided services. he put bill to company in that bill he charged both service tax and vat on gross value.

like this

net amount

VAT @ 15% on net amount

service tax @ 7.416% (after40%abatement) on Net amount

so now question his in that bill he not mentioned that how much charged related to service. he only mention that in bill which type of food supply to u. (like tea, lunch, snacks etc.) on that @ per unit fixed rate charged by him..

so can he is eligible to charged both service tax and vat on net amount. if he not shown in bill hw much value realted to service.

please reply your valuable suggestion.

have a nice day.

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3 Replies

Mr Subrata Dasgupta (Finance Professional) (171 Points)
Replied 12 March 2013

Dear Prateek

There is an element of service in the catering business. This has been recognised under service tax law. There is also an element of supply of food which is chargable to VAT. The price paid and billed by a caterer is a lump sum price which includes the supply and service components.

In both the VAT and Service Tax Laws, such caterers are given an option for payment of tax based on certain percentage of the net value. This is popularly known as Composition Rate.

In your case the caterer has rightly charged VAT and Service Tax at the Composition Rates.

While charging the Tax at the Composition of abated rates, the caterer becomes ineligible for availing VAT Input Credit and Cenvat Credit under the VAT and Service Tax Law respectively.

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prateek aanchalia (CA) (859 Points)
Replied 13 March 2013

now my question is can service provider charged service tax and vat on an single value. eventhough he is not bifurcated service and goods amount in bill.

as per my opnion if he not bifurcated service and goods amount in bill than how both service tax and vat charged on single value.