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.
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. (AI Summary)