Tinaz (132 Points)
18 June 2009Dear Colleagues,
We deal in Indivisible AMC's for telecommunication equipments. We pay service tax on the entire amount. We do not charge VAT (in the shape of WCT) in our invoice. Still some of our customers are deducting WCT on the contract value. Can we claim credit of such WCT?
Is VAT (WCT) applicable on Indivisible AMC Contracts?
RAJU
(LEARNER)
(1089 Points)
Replied 18 June 2009
Hi,
If there is an element of material in the work, you are liable for VAT (WCT) on the material portion. Service tax is payable on service portion. WCT TDS is advance payment of tax and you can adjust the same from your VAT liability.
Tinaz
(132 Points)
Replied 28 July 2009
Hi friends, I agree with your views but can you please guide me on the tax implications of indivisible contracts wherein it is not possible to segregate material and service component. What are the composition schemes available for same and how is service tax to be charged for same.
In Maharashtra VAT is to be charged @ 8% on indivisible works contracts, how is service tax to be charged on same.
RAJU
(LEARNER)
(1089 Points)
Replied 29 July 2009
Hi,
Madam where were you during all these days.
In VAT provisions, the Rules have provided for deduction for labour charges at a specific rate like 15%, 20% etc., in Karnataka. I believe there may be similar provisions in Maharashtra Also. There is an option to pay composition tax at a specific rate (4% in Karnataka) on total value inclusive of labour charges.
In service tax also there are provisions similar to this.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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