both vat and service tax on job work

[chetan kumar]

I saw.a purchase bill of job work. There was mentioned that only 60 percent of portion was taxable in VAT. . Entry was s below

party name. dr.

To cenvat

To Vat input

To surcharge on vat input

To job work(60 percent)

To jobwork taxfree(40 percent )

I had read that job work is either taxable under excise or st. But here entry is very diffrent.. Even in some entries excise, vat and st is chrged at once. Pls clear my doubt..

AI Summary

Taxation of job work: excise and service tax are mutually exclusive, while VAT or WCT may also apply.
Accounting entries split job work invoices into taxable and tax free/service portions; where excise duty is leviable service tax generally does not apply, and where service tax is leviable excise does not apply. VAT/CST or works contract tax may be imposed in addition to either excise or service tax under State law. Taxable VAT is computed on the net amount after deducting the labour/service component percentages referenced in the industry allocation table.