Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Vat or service tax

AMIT MORYE (MANAGER- SERVICE TAX ) (102 Points)

25 August 2012

What is applicable, ‘service tax’ or ‘VAT’ or ‘both’ to amount paid as a ‘Maintenance charges for firewall software’? Vendor has provided device of IT and maintenance charges for 2 years, and charged both the taxes at full rate on entire amount.

Reply
Follow
Share

4 Replies

Arun Kumar Singh (GST Advocate) (15220 Points)
Replied 25 August 2012

Both are separate, only service tax will be applicable on maintenance charges and sale tax will be applicable on sale of devise.

Upgrade to CAclubindia Pro. Subscribe Now!

ACMA Obulirajan R (M.Com, ACMA) (1119 Points)
Replied 25 August 2012

Service tax will be charged for the services provided and VAT will be chaged for sale of goods. Hence both will be applicable.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 27 August 2012

Charging both vat and service tax on the entire value is wrong. VAT for goods value, and service tax for charges.

AMIT MORYE (MANAGER- SERVICE TAX ) (102 Points)
Replied 31 August 2012

in the case of Imagic Creative Pvt. Ltd. vs Commissioner of Commercial Taxes & Ors supreme court held that: Payments of service tax as also Value Added Tax are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. In a case of this nature, sales tax would not be payable on the value of the entire contract; irrespective of the element of service provided. [Para 28] [475-F-G] can this judgement defand the chargability of VAT and ST on entire amount?