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Tax applicable on wall painting?

22 April 2014

I want to ask that Why there is only Service tax applicable on Wall Painting (12.36%) when we have to use Paint which is taxble as (VAT 12.5%)

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5 Replies

CA Deepesh Ruhela (Keen to Learn) (3271 Points)
Replied 22 April 2014

Service tax is not chargeable on goods sold. Since, Sale of goods is not a service.

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Jitender Prajapati (Owner) (25 Points)
Replied 22 April 2014

But as we have to use Paint (which is a product) for wall painting so why its not treated as partially Vat and partically service tax?

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 22 April 2014

It is treated as works contract under service tax as per section 65B(54), accordingly for paying service tax, rule 2A of Service tax(determination of value) rules, 2006 is to be followed.

Furthermore, such contracts are generally categorised as "works contract" in state laws as well & VAT is charegable on such contracts. However, the particular state VAT act needs to be referred before arriving at final conclusion.

CA Deepesh Ruhela (Keen to Learn) (3271 Points)
Replied 22 April 2014

Sir, VAT is chargeable on Goods i.e. paint. and service tax leviable on labour charges. Agree with Sumit sir, it is works contract service.

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zoya (student) (41 Points)
Replied 19 May 2016

Sir,

I have the same query if a person is involve in business of wall painting and and carrying out repair works in building like renovation , plastering, tiles furnishing so wether he should get registered himself under VAT or work contract, because he buys tiles from outside and then sells it to the customer.

Thanks