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TMI Blogservice tax and vatX X X X Extracts X X X X X X X X Extracts X X X X ..... Sir, I have received a tax invoice from a party. the invoice related to supply and installation of Quick Heal Antivirus. The bill date is 21 April 2016 and in this invoice the party has claimed service tax 14.5% and VAT 5% on same bill value. So you are requested to please suggest me The same charges are applicable on Invoice or not. The other details are given below:- 40 No. Antivirus @1800/- p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Antivirus = ₹ 72,000/- Service Tax14.5%= Rs.10,440/- Vat Output 5% (Sale)= ₹ 3,600/- Departmental Charges (0.25%)=Rs. 180/- So please help me and suggest me the above mentioned tax calculation are correct or not as per point of taxation and Law also. - Reply By Ganeshan Kalyani - The Reply = ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sir, both VAT and Service tax is applicable. Thanks. - Reply By JSW CEMENT LIMITED - The Reply = Sir, Both Service tax and VAT would be applicable. But, In your case, it is seen that service tax and vat is charged on the same value which seems to be wrong. VAT has to be charged on supply portion while service tax has to be charged on Service portion. It is a composite contract, then, you may op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t either for a composition scheme, or vat can be charged after specified deduction under the respective states vat law. From you query it is not clear as to which state the transaction pertains to. Regards, V.Venkat Raman - Reply By Ganeshan Kalyani - The Reply = Sir, the software service is liable to service tax as the Central Government considers it as Intellectual Property Service and VAT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable as State treats it as Transfer of Right to Use. Hence both service tax and VAT is applicable on software service. Secondly, the valuation rule does not specifically provides for any per cent age or rate in order to determine the service portion or material portion in total consideration to tax both. Under such situation the service provider charges both taxes with full rate of tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have seen that suppliers charges both tax with full rate. As far as both the taxes paid are cenvatable there is no issue but working capital gets blocked. Thanks. - Reply By JSW CEMENT LIMITED - The Reply = VAT or CST is leviable only on sale whereas service tax is leviable on service portion. In every state VAT law there is some standard deduction in case of composite works contract. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case, the transaction is a works contract as it involves installation service as well as sale of software. It is wrong to charge both on full value without applying standard deduction. - service tax and vat - Query Started By: - Dharmender Kumar Dated:- 25-7-2016 Service Tax - Got 4 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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