how to compute service tax in case composite contract and karnataka vat

[manju nath]

Dear Experts,

 

We are registered Private Ltd Company holding Vaiid Karnataka VAT Registration and Service Registration Number.

We got a composite work order for AC AMC for Rs 50000/-( which is inclusive of labour and material supply). Under Karnataka VAT Act we have been paying Karnataka Vat on 30 percent of Rs 50000/- at the rate of 14.5 percent which worked out Rs 2175/- Now my query is will Service Tax payable after abatement of 70 percent on Rs 35000/-- 0r 32825 which (35000-less 2175/-).

Request to clarify will service tax payable on Rs 35000/-

or after deducting vat of Rs 2175/-                   32825/-

 

Regards,

c.k.manjunath

 

 

 

 

AI Summary

Service Tax Calculation on Composite Work Order: Pay on 40% of Rs 50,000, No VAT Deduction Needed. A private limited company in Karnataka, registered for VAT and Service Tax, received a composite work order for AC maintenance valued at Rs 50,000, inclusive of labor and materials. They pay Karnataka VAT on 30% of the amount at 14.5%, totaling Rs 2,175. The query is whether Service Tax should be paid on Rs 35,000 or Rs 32,825 after deducting VAT. Responses clarify that Service Tax and VAT are independent; thus, Service Tax should be paid on 40% of Rs 50,000, equating to Rs 20,000, without deducting VAT. Another response states the Service Tax liability is on Rs 35,000.