Comprehensive Annual Maintenance contract (CAMC)

[Asked by Guest]

Dear Sir,

Our company is  going to awarded Comprehensive Annual Maintenance cost (CAMC i.e. Material plus labour cost   contract) for maintenance of Lift

Contractor is charging Vat @10% & Service tax  @10.3% on full value contract.

whether contractor is charging right tax i.e. both the taxes on full value?

Please specify section for service tax.

[Aliasgar Tambawala]

is vat being charged @ 10%?

VAT will be charged on material component and Service Tax will be charged on labour component.

AI Summary

Tax treatment of maintenance contracts: VAT applies to materials, service tax to labour components in CAMC
VAT applies to the material component of a Comprehensive Annual Maintenance Contract and service tax applies to the labour component; the discussion advises apportioning the contract value accordingly rather than charging both taxes on the entire contract value. No statutory citation for service tax was provided in the replies.