Applicability of service tax in the case of AMC, Installation and commissioning of Genset product, Service Tax

[dhanesh tk]

I need a solution for the appliability of service tax. My client is ,a authorized dealer of Mahindra & Mahindra Ltd (M&M),doing installation, commissioning and maintances of Genset product manufactured by the M&M.Total amount paid by M&M is Rs.1650/-, and my client billed Rs.825/- as labour charges (add service tax @ 10.3%) and Rs.825/- as sales (including VAT @ 12.5%).That is total amount split for service and sale in the ratio of 50:50. My doubt, is this tratment is correct or not? Dhanesh.tk

Posts / Replies

[CHITRA RAGURAM]

Ur treatment of applicability of Service Tax 10% on service charge and VAT 12.50% on the product is correct.

But the bill should be raised on actual basis and not 50:50 basis. If you supply a spare on maintenence of the Genset then VAT is applicable or if you only provide service alone, ST is applicable.