VAT charge on gross amount instead of basis amount

[Jignesh Shah]

We are service proivder of Maintenance & Repair service to corporates. We have one issue regarding double taxation: As per I know VAT Rules says VAT always to be charged on total amount instead of basis amount. But our client need clarification for that. Thay argued i.e. vat charge only material cost not on total means material + service tax amount. Please share and guide for the same.

AI Summary

Clarification on VAT: Charge Separately for Materials and Services or Pay Both Taxes if Billed Together. A service provider for maintenance and repair services to corporations raised a query about VAT charges, questioning whether VAT should be applied to the gross amount or just the material cost. The client argued that VAT should only apply to material costs, excluding service tax. The response clarified that VAT can be charged separately on materials and services if billed separately. However, if billed together, both VAT (under Works Contract Tax) and service tax must be paid according to the nature of the transaction, as it involves both spares and repair activities.