Vat or service tax

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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.
Replies (4)

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

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

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

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?


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