Service Tax
Debashis Mandal
(Querist) 26 December 2010
This query is : Resolved
Respected Experts
If an assessee is involved in AMC business of electronic appliances & making a contract with customers for providing spare parts free of cost if needed within the concerned contract period - in that case vat is to be born by the service provider now regarding service tax - service tax is to be taken on which amount - is it total amc fees amount or any partial amount of that amc fees.
Thanks
Debashis Mandal
H.M.Patnaik
(Expert) 28 December 2010
Service tax will be calculated on the following value:
i) If it is a composite contract where cost of Spare Parts cannot be ascertained, the Gross AMC charge is exigible to tax.
ii) Where the Cost of Spare Parts can be ascertained , there The Gross Value minus the cost of Spares used is to be taken for Calculation of Service Tax.
However as the Querist has taken care to remark that replacement of Spare Parts if needed in course of AMC shall be made free of cost , value thereof is not to be excluded from the Gross Value of AMC for
arriving at the Value of Taxable Service.
soumitra basu
(Expert) 20 April 2011
There will be no VAT only service tax has to be paid on the entire value.
