Credit on AMC contract, VAT + CST

[Dhaval Kakkad]

one company raised bill to us with Service tax ( In case of maintenance or repair or reconditioning or restoration or servicing of any goods , pay service tax on 70 percent if value )  plus VAT charges as Gujarat Vat Rules that u can charge on AMC bill 80 percent of Basic Value example below :

Basic Amount of Invoice :                                           Rs. 100=00

Service Tax ( 70 percent of Value ):                                       Rs.     8=65 ( 12.36 percent on 70 percent of Basic Amount )

Total :                                                                            Rs. 108=65

VAT ( Gujarat Vat – 12.50 percent )                                       Rs. 10=00 ( 12.50 percent on 80 percent of Basic Amount – i.e.

                                                                                       100=00  x 80 percent =80  ,  80=00 x 12.50 percent = 10.00

And we cliam tax credit on VAT collected on 80 percent amount ( i.e. Rs.10 in above example) ???

Posts / Replies

[Pradeep Khatri]

If GVAT allows for availing the Input Tax Credit, then you may avail the Input Tax Credit on such transactions of Rs. 10.00 on AMC.

Team YAGAY & SUN

(Indirect Tax Consultants)

[Sanjeev Tambe]

Actually VAT ITC is allowed on machinery spares. If you have entered in AMC with material then your AmC contractor should raise bill for spares separately. In such situation you can save service tax on the value of spares charged as service tax valuation rule 2(a)(i) clearly says that the value of the goods sold is to be deducted from total contract value and only service portion is to be subjected to service tax.

You should ask your amc contractor to mention cost / value of spares used in providing service separately.

Sanjeev Tambe

[Dhaval Kakkad]

at the rate of pradeep : I want to know that whether GVAT allows the input tax credit or not ?

[MUKUND THAKKAR]

Dear Dhaval,

let  me know on what ground  Gvat not allow  Input Tax credit.?

Mukund Thakkar