VAT On Catering/Banquets

Jatin Agrawal (CA) (130 Points)

14 September 2009  

Our client is in the busineess of providing catering catering services and banquets . they charge a bill in the following manner

Consolidated Amt.            1000

Vat @ 12.5%                   125

Ser.Tax @ 10.3 on 600     61.80

(60% Abatement)

Total                              1186.80

but my question is whether the ABATEMENT is also available in vat as well,

are they supposed to charge vat on 600 i.e. 12.5% of 600 or 12.5% of 1000 only.

Any help is appreciated.