Levy of Vat and Service Tax

[vijayapura shankaranarayana sastry lakshmi kantha]

LEVY OF VAT AND SERVICE TAX: COMPANIES LIKE ORACLE HAVE STARTED LEVYING BOTH VAT AND SERVICE TAX ON SOFTWARE LICENCES SUPPLIED BY THEM. AS PER SUPREME COURT JUDGEMENTS IN OUR OPINION VAT AND SERVICE TAX BOTH ARE NOT LEVIABLE AND VAT ON PRODUCT AND SERVICE TAX ON SERVICES AS THERE IS NO CHANGE IN LAW ON INTRODUCTION OF IT SERVICES UNDER SERVICE TAX FROM CURRENT YEAR MAY 08. GRATEFUL TO HAVE YOUR VIEWS

AI Summary

Debate Over Dual Taxation on Software Licenses: VAT and Service Tax Applied Despite Supreme Court Guidance Companies like Oracle are levying both VAT and Service Tax on software licenses, despite Supreme Court judgments suggesting this practice is incorrect. The consensus among forum participants is that VAT and Service Tax should not be applied simultaneously on the same value. Instead, the value should be divided into two parts: one for the sale of software, subject to VAT, and the other for services, subject to Service Tax. Participants also discuss reporting requirements for labor in VAT returns and request information on case laws and accounting principles for separating sale and service components.