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Currently
A Service Provider cannot claim input of Service Tax on Expense Bills
However he can take input of Service tax and Excise
Q3
Service and Expenses
| B LTD | AIRTEL | ||
| Purchase | 60000 | TELEPHONE | 2000 |
| vat 5% | 3000 | Service Tax 14% | 280 |
| 63000 | Swachh Bharat Cess 0.5% | 10 | |
| Krishi Kalyan Cess 0.5% | 10 | ||
| 2300 | |||
| X LTD | |
| Sale | 100000 |
| vat 5% | 5000 |
| 105000 | |
What is Vat Payable?
| Particulars | Amount |
| Output Vat | 5000 |
| Less | |
| Input Vat | 3000 |
| Vat Payable | 2000 |
No Input of Service Tax for Vat Dealers
This is because Service Tax is under Central Government and Vat under State Government
In Future
On All bills,both State GST and Central GST will be charged
| PARTICULARS | AMOUNT | AIRTEL | |
| PURCHASES | 60000 | TELEPHONE | 2000 |
| CENTRAL GST 12.5% | 7500 | CENTRAL GST 12.5% | 250 |
| STATE GST 5% | 3000 | STATE GST 5% | 100 |
| GRAND TOTAL | 3000 | GRAND TOTAL | 100 |
Sales Bill
| PARTICULARS | AMOUNT |
| SALES | 100000 |
| CENTRAL GST 12.5% | 12500 |
| STATE GST 5% | 5000 |
| GRAND TOTAL | 117500 |
| PARTICULARS | AMOUNT |
| SALES | 100000 |
| CENTRAL GST 12.5% | 12500 |
| STATE GST 5% | 5000 |
| GRAND TOTAL | 117500 |
Remarks
On Such items,charging both Central and State GST Rates increases the tax burden and compliance cost of filing returns
Hence on such transactions,GST Rates should be reduced or Central GST Should not be charged at all
