Can VAT & Service Tax charged at same Time?
Answer:
it can be charged at the same time. it depends on the government.
no not at all, both VAT and Service Tax are different things.
Basically service tax is the tax paid by you to the government when you r getting some-kind of service eg. eating out at a restaurant you pay some tax for their service or having coaching at an institute.
VAT is essentially is paid on commodities i.e. things you buy are taxed and that tax is VAT
The short answer is yes. The Constition of India has something called the Central List, State List and Consurrent List. Each of the lists provide for the jurisdictional limits within which the central government, state governments can legislate. The concurrent list gives both the central goivernment and the state government powers to legislate on a particular issue.
The VAT in India is unique in the sense that it is just a sales tax. States do not have the power under the constitution to tax services and can only tax sale of goods within the state borders. This was initially the sales tax and now is VAT.
The service tax on the other hand introduced in 1994 by the Finance Act imposes tax on services. The list of services is being slowly expanded.
In a true VAT system, goods and services are covered under VAT, but the constitutional restrictions in India have meant that the VAT system is just a sales tax with an input tax credit mechanism which is a feature of a VAT system. In the old sales tax system, the concept of input credit (credit for taxes paid) was non-existent.
The Indian government has bene talking about making changes to the constituion to allow for the states to tax services so that it is a true VAT system. Further there was an announcement in the last budget to introduce a GST system from 2010.
Hope that helps. Cheers!!
yes. in case of work contracts.
VAT is state tax in lieu of sales tax.
service tax is central tax on services rendered by a person.
there are three lists defining distribution of revenue areas in india. state list, centre list and concurrent list. vat is in state list and service tax is in centre list. so it is possible that some states levy vat on some service which is also charged to service tax.
The answer is Yes as per present law.
one typical example is delhi VAT where in they levy VAT on shamiana and the same is also taxable under the service tax act.
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