VAT CHARGE ON 80% OF BASIC VALUE ( AMC services )

[Asked by Guest]

Respected sir,

We are manufacturing of Crane at Gujarat ( Engineering Unit ) . Our IT department brought AMC ( Anual Maintaince service ) contract with one giant hardware company at Karnataka .

This IT company raise bill to us with Service tax ( In case of maintenance or repair or reconditioning or restoration or servicing of any goods , pay service tax on 70% if value )  plus VAT charges as example below :

Basic Amount of Invoice :                                           Rs.100=00

Service Tax ( 70% of Value ):                                       Rs.     8=65 ( 12.36% on 70% of Basic Amount )

Total :                                                                            Rs.108=65

VAT ( Gujarat Vat – 12.50 % )                                       Rs.  10=00 ( 12.50% on 80% of Basic Amount – i.e.

                                                                                       100=00  x 80%=80  ,  80=00 x 12.50% = 10.00

 

NOW QUESTION:

Is it any Gujarat Vat Rules that u can charge on AMC bill 80% of Basic Value? If yes Please provide details guideline.         

Thanks and Regards,

SNEHAL SHAH                  

AI Summary

VAT applied to an abated taxable value can overlap with service-tax apportionment, creating potential double taxation and credit issues.
Whether VAT on annual maintenance contracts is applied after a VAT abatement that deducts a labour component-resulting in VAT being charged on a residual portion of the invoice-while service tax is separately levied after its own abatement, producing overlapping taxation; whether this VAT abatement is grounded in the VAT Act and Rules; and whether VAT charged on the VAT-assessed portion is available as input tax credit.