vat and service tax on catering services

Tax queries 2382 views 1 replies

Rajesh Kumar Loya

student

177 Points Joined July 2010

PRISM CATERERS Services provided Rs.27091 Add:Service Tax @ 5.15% Rs.1395 Total Rs.28486 Add:VAT @ 14.5% on 28486 Rs.4130 Grand Total Rs.32617 my doubt is 1.Criteria for charging both vat and service tax 2.why vat is charged on the amount including service tax.

Replies (1)

Sathya Sankeerth K N

Chartered Accountant

429 Points Joined May 2011

Service Tax becomes a part of your cost. Definitions used by State VAT dept. confirms this. It is correct to charge VAT on the service tax also as VAT is charged on the aggregate amount of the goods bought or sold.