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Service tax and vat on a product

Queries 1035 views 3 replies

CA.Varalakshmi.M

Manager-Finance

482 Points Joined February 2012

Hi ,

We sale licensed softwares to our clients and apart from it we provide repair and maintenance services of that software.we charge both VAT and Service tax on bill amount.

Now my client is not willing to pay both service tax and VAT,asked us to charge any one tax only.what are the remedy's we have ?

What are the consequences of not charging those taxes by us.

Pls explain....

Replies (3)

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

If you do so, 100% liability will come upon you. and along with that, penalty of an equal amount of tax will be upon you. This is the position under Service Tax. Now choice is yours.

CA.Varalakshmi.M

Manager-Finance

482 Points Joined February 2012

Thanks Ajit.

Then what abt VAT?

dnt we have any other option like taking undertaking from the client and like that?

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

Even if you take a declaration it would not suffice as the departmental cost will not be reimbursed under the said clause. For the purpose of VAT they will charge penalty and interest on the same.