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Vat plus service tax

CA.Varalakshmi.M (Manager-Finance) (482 Points)

05 July 2012

Hi ,

We sale licensed softwares to our clients and apart from it we provide repair and maintenance services of that software.

Now my question is do we charge both VAT and Service tax on bill amount?

Why do we charge service tax on bill amount?

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7 Replies

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 05 July 2012

If you sell customized software, then Service tax and VAT both will be applicable, but if the software is sold through a media and is off the shelf software, then there is no need to charge service tax. Service tax, if applicable will be on the value of the software.

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CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 05 July 2012

Thank You so much,

and I have one more doubt.When twe are deducting TDS ,shall we deduct TDS on gross amount including ST and VAT ?

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 05 July 2012

TDS is to be deducted from the total amount payable, so naturally it will include both VAT and Service tax.

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 05 July 2012

Thank You,

U have mentioned in your previous reply that service tax is chargeable on value of software.

is it chargeable on the value of software or value of software including VAT?

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 05 July 2012

On the value of the customized software and not on VAT.

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MIHEER DESAI (PARTNER) (24 Points)
Replied 06 July 2012

Dear Sir.

We run a printing press in mumbai. our main job is printing, binding, designing, etc.

Sometimes Design is provided by Party which we print on papers supplied by us.

( Paper, Ink, Plates, etc. provided by us) at the time of billing we mention - Printed Material (Item Descriptttion only)

Is service tax applicable on the same?

Also for job work - paper supplied by sub-agents we print as per there requirement....is service tax applicable above MVAT @ 5% ?

Our Turn Over is 25 Lakhs as per last financial year.

Is there any exemption on printing industry under service tax? if so under which rule?

your proper guidance will be highly appreciated.

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 06 July 2012

You are liable to pay service tax w.e.f 01/07/2012 on the amount of bills raised after the above said date. No exemption is provided to you. Now in the process of providing service, if you also provide the material from your side, then as per Rule 2 of the Service tax (Determination of Value) Rules, 2006, you need to include the value of material provided in the execution of such work as a Works Contractor.