Please Help: Service Tax on spare cost
Posted Date : 19-Feb-2012 , 10:56:58 am | Posted By SNTSH GUPTA
we hv the AMC wth BEML for maintaining the heavy machine day to day , This service come into the head of Maintainance repair and spare , and they billed the AMC bill including spare cost and on total they charge service tax , my question is that is spare cost exclude for charging to service tax , acording to our contract with BEML he charge spare cost on hourly basis, and they donot provides any actual exp incured for spare cost , is such typ of spare cost is includable in bill or exclude ?
Category : Service Tax | Answers : 2 | Comments : 5 | Hits : 686
Answers
Answer By: Mrattunjay
Yes, spare cost can be exclude but invoice should be seperate as per P.O. and should showing the specific condition other wise taxable for service tax
Answer By: Ashish Karundia
Dear Querist,
In the instant case, service tax is chargeable on total billing including spare cost as he is charging hourly rate for the same and not actual cost. Further, please note that service tax is chargeable on gross amount and the certain amounts are excluded only if the service provider is acting as the Pure Agent.
Thus, in the light of above service tax is rightly charged on total amount including spare cost (hourly rate). Hope the above suffice. In case of any clarification, please feel free to revert.
In the instant case, service tax is chargeable on total billing including spare cost as he is charging hourly rate for the same and not actual cost. Further, please note that service tax is chargeable on gross amount and the certain amounts are excluded only if the service provider is acting as the Pure Agent.
Thus, in the light of above service tax is rightly charged on total amount including spare cost (hourly rate). Hope the above suffice. In case of any clarification, please feel free to revert.
Comments
Krishna Chandra Santi
19-Feb-2012 , 08:53:01 pmI think cost of spare parts r to be excluded for charging service tax. Cost of spare parts r to be charged separately including VAT, wheather in hourly basis or on any other method.
Krishna Chandra Santi
19-Feb-2012 , 08:54:13 pm* VAT shouldn't be shown separately in this case. Spare parts r the fixed assets of BEML, and they r nt charging the cost of depreciation as cost of spare parts on their AMC bill as it was mentioned in the question they r nt showing the actual expenditure. Thus cost of spare parts to be shown separately fromthe cost of service which is chargeable to ST.
SNTSH GUPTA
19-Feb-2012 , 11:55:44 pmas per earlier dicided case in Wipro Ge medical service , it was absorbed that when we are paying the sales tax on spare cost then it is not include in service tax , but my problem is we have not actual data for how much BEML incurring cost for spare parts , Bcs they charge spare cost on hourly basis . can we ask for BEML to give actual cost incured for spare cost , or can we go for appeal like Wipro GE medical system Vs.Cst 2009 18 STT 508
SNTSH GUPTA
20-Feb-2012 , 12:09:37 ammy problem is that they r not provides us actual spare cost they charge on hourly basis rate as per the our contract . in this charges include his maintains service fees and spare cost ,
Kshitij Nijhawan
20-Feb-2012 , 07:41:54 pmagree with above answers