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

Service tax on AMC contracts may apply to contract value while VAT targets the material portion, requiring apportionment.
Service tax on AMC contracts may be applied either to the full contract value as a taxable service or only to the service component, while VAT is charged on the material portion after an abatement where labour content is not separately recorded; an additional local cess may apply to the VAT component. The Sixth Schedule classification under state VAT rules and central notification 12/2003-ST are cited as relevant guidance, and apportionment must avoid treating the same value simultaneously as sale of goods and service.