Taxes on warranty services & annual maintenance contract

[Akhilesh Yadav]

Hi, What will be tax applicable on warranty services provided on any product? What will be tax applicable on annual maintenance contract (AMC)?

[YAGAY andSUN]

On the AMC contracts, VAT/CST (as the case may be) will be applicable.  Further, AMC Contract will also attract Service Tax on the Services Portion only ,if , the proper records are maintained accordingly.

If the warranty services are free of cost, then, service tax will not be applicable otherwise it is applicable.

 

AI Summary

Understanding Taxes on Warranty Services and AMCs: VAT/CST and Service Tax Explained for Different Scenarios A forum participant inquired about the taxes applicable to warranty services and annual maintenance contracts (AMCs). A respondent clarified that AMCs are subject to VAT/CST depending on the jurisdiction, and service tax is applicable on the service portion if records are properly maintained. For warranty services, service tax is not applicable if the services are provided free of charge; otherwise, it is applicable.