Double taxation on software paper licenses

ootbs (Director) (23 Points)

05 January 2017  

Hi,

I own/run a company that provides IT solutions & services to smal businesses & start-ups.. We also resell Hardware equipment, and Software (Microsoft, Adobe, etc) licenses.. For hardware, packaged software, services, the taxation is pretty straight-forward. However, I am not aware on what to do, incase of Software paper licenses, that attract double-taxation (Service Tax & VAT)...Let me explain ...

I have two companies (For the sake of billing)  

  1. iRave Tech - Partnership. This was the first company. This company has a Service Tax number ONLY. When we started off, we were providing on services, and not reselling any hardware equipment .. 
     
  2. iRave Tech - Sole Proprietership - This company was started around 2  years back, because I wanted to start reselling hardware equipment. This company has ONLY a VAT number, and NO Service Tax Number ... I was told to do it this way, by my (ex)accountant ... 

Both companies have different bank accounts ... For most parts, everything is fine.. But, the issue arises when I have to charge Service Tax & VAT... I need to bifurcate the payment received for Service Tax & VAT, and I cannot seem to figure out how ..  I was going by my (ex)accountant's suggestion, and am currently, losing the VAT set-off. 

I would much appreciate any suggestions/advise on how to do the billing & receive payment,  for the above scenario ..