TaxTMI 
TaxTMI 
If a party submit only payment certificate showing VAT/Sale Tax deducted by the Service recipient and he imparted the construction work to them, is a valid ground to assume that he has given work contract service.?
Payment certificate and abatement
19 Mar 2025 
4 Replies 
578 Views Asked by
VAT as proof of sale not service: abatement under Rule 2A can be claimed using VAT returns.
Payment of VAT or sales tax deducted by a recipient constitutes evidence of a sale, not of a service; VAT and service tax are mutually exclusive. Abatement under the service tax valuation rules may be claimed on the basis of VAT/sales tax returns or proof of VAT payment, consistent with the judicial ratio treating VAT payment records as a basis for abatement rather than conclusive proof of a work contract service. (AI Summary)
Payment of VAT or sales tax deducted by a recipient constitutes evidence of a sale, not of a service; VAT and service tax are mutually exclusive. Abatement under the service tax valuation rules may be claimed on the basis of VAT/sales tax returns or proof of VAT payment, consistent with the judicial ratio treating VAT payment records as a basis for abatement rather than conclusive proof of a work contract service. (AI Summary)