Service Tax on AMC contract of Computer/laptops

[Reshma kochar]

Hi All,

We are proposed by a Vendor from Banglore for  annual maintaince of our computer and laptops.

Vandor has send the quotation  with following taxes:

Base Value

Service tax @ 10.3% on 100% of base Value

VAT @ 12.5% on 80% of base value

UP Additional Tax @ 8% on VAT

Do let us know, Is this arrangment is valid or not?

AI Summary

Dispute Over Tax Legitimacy and Application on Annual Maintenance Contracts for IT Equipment: A Closer Look at VAT and Service Tax A vendor from Bangalore proposed an annual maintenance contract (AMC) for computers and laptops, including a service tax of 10.3% on the full base value, VAT of 12.5% on 80% of the base value, and an additional UP tax of 8% on VAT. A participant confirmed that both VAT and service tax apply to AMC contracts, with service tax on the full contract value and VAT on 80% due to abatement norms. Questions arose about the legitimacy of the UP tax and the application of VAT rates. Participants referenced the Karnataka VAT Act and relevant notifications for further clarification.