TaxTMI 
TaxTMI 
Supply of goods transactions on which VAT is not chargeable, service tax shall be applicable?
Supply of Goods
22 Jun 2011 
4 Replies 
1175 Views Asked by
Service tax applicability: VAT exemption alone does not convert a goods sale into a taxable service; analyse legal character.
Service Tax is a tax on taxable services distinct from VAT, which taxes sale of goods; VAT exemption alone does not make a supply a taxable service. Composite supplies combining goods and services may attract service tax under works-contract or composition rules, so chargeability must be determined by analysing the transaction's legal character against relevant statutory provisions. (AI Summary)
Service Tax is a tax on taxable services distinct from VAT, which taxes sale of goods; VAT exemption alone does not make a supply a taxable service. Composite supplies combining goods and services may attract service tax under works-contract or composition rules, so chargeability must be determined by analysing the transaction's legal character against relevant statutory provisions. (AI Summary)