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difference between vat and service tax

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked over 3 years ago

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8 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Ashika answered almost 3 years ago

VAT(value added tax) is a indirect tax imposed by State government on sale of Goods with in a particular state. which essentially means that the buyer and the seller needs to be in the same state. Only when tangible goods and products are sold, VAT can be imposed. Service Tax is a form of indirect tax imposed only on services provided. From the point of view of a layman, providing services means assistance in any work, taking up of any work on behalf of others, any professional assignment or rendering intangible benefits to others. Difference of Taxability:- VAT (Value Added Tax) is a form of indirect tax imposed only on goods sold within a particular state, which essentially means that the buyer and the seller needs to be in the same state. Only when tangible goods and products are sold, VAT can be imposed. Service Tax is a form of indirect tax imposed only on services provided. From the point of view of a layman, providing services means assistance in any work, taking up of any work on behalf of others, any professional assignment or rendering intangible benefits to others.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Pankaj answered almost 3 years ago

VAT(value added tax) is a indirect tax imposed by State government on sale of Goods with in a particular state. which essentially means that the buyer and the seller needs to be in the same state. Only when tangible goods and products are sold, VAT can be imposed. Service Tax is a form of indirect tax imposed only on services provided. From the point of view of a layman, providing services means assistance in any work, taking up of any work on behalf of others, any professional assignment or rendering intangible benefits to others. Difference of Taxability:- VAT (Value Added Tax) is a form of indirect tax imposed only on goods sold within a particular state, which essentially means that the buyer and the seller needs to be in the same state. Only when tangible goods and products are sold, VAT can be imposed. Service Tax is a form of indirect tax imposed only on services provided. From the point of view of a layman, providing services means assistance in any work, taking up of any work on behalf of others, any professional assignment or rendering intangible benefits to others. Governing Act: Service Tax is governed by Finance Act, 1994. It was then when the finance minister brought in taxes on services rendered to reduce the degree of intensity of taxation on manufacturing and trade without forcing the government to compromise on the revenue needs. Service tax does not have any specific act to govern its stipulations. VAT (Value Added Tax) is governed by respective state Acts. Every state has a separate and distinct VAT act reserved for their state.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered almost 3 years ago

Service Tax is a form of indirect tax imposed only on services provided. Service Tax is governed by Finance Act, 1994 VAT (Value Added Tax) is a form of indirect tax imposed only on goods sold within a particular state, which essentially means that the buyer and the seller needs to be in the same state.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 maneesha answered about 3 years ago

vat means value added tax that is tax levied on goods. whereas service tax refers to the tax levied on the services rendered.

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Open uri20170510 32134 n6e4ab?1494421759 Geetanjali answered over 3 years ago

VAT(value added tax) is a indirect tax imposed by State government on sale of Goods with in a particular state. which essentially means that the buyer and the seller needs to be in the same state. Only when tangible goods and products are sold, VAT can be imposed. Service Tax is a form of indirect tax imposed only on services provided. From the point of view of a layman, providing services means assistance in any work, taking up of any work on behalf of others, any professional assignment or rendering intangible benefits to others. Difference of Taxability:- VAT (Value Added Tax) is a form of indirect tax imposed only on goods sold within a particular state, which essentially means that the buyer and the seller needs to be in the same state. Only when tangible goods and products are sold, VAT can be imposed. Service Tax is a form of indirect tax imposed only on services provided. From the point of view of a layman, providing services means assistance in any work, taking up of any work on behalf of others, any professional assignment or rendering intangible benefits to others. **Governing Act:** Service Tax is governed by Finance Act, 1994. It was then when the finance minister brought in taxes on services rendered to reduce the degree of intensity of taxation on manufacturing and trade without forcing the government to compromise on the revenue needs. Service tax does not have any specific act to govern its stipulations. VAT (Value Added Tax) is governed by respective state Acts. Every state has a separate and distinct VAT act reserved for their state. **Registration under Act: ?** Service Tax registration is a function of gross turnover. Once the turnover of the assessee crosses a threshold limit of Rs 10 lacs, the service provider is required to get itself registered under the law, and compulsorily required to charge service tax on services provided once the turnover crosses Rs 10 lacs. VAT (Value Added Tax) registration is compulsory for dealers having turnover exceeding Rs 5 lacs (or increased limit of Rs 10 lacs in some states).On registration, such dealer is allotted a unique 11 digit TIN (Taxpayer’s Identification Number). **Rate of Charge:** Service Tax: The present rate is 14 %, which is leviable on all services except those captured in Negative List(the list comprising of 17 specific services which are exempt from service tax). VAT (Value Added Tax) do not have any uniform rate. General rate is 4% and 12.5% but as it is a satet levet tax so applied accordingly. **Valuation Method**: Service Tax is leviable on the value of services rendered. VAT (Value Added Tax) carries state-to-state varied valuation methods for computing sale price.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 3 years ago

VAT (Value Added Tax) is a form of indirect tax imposed only on goods sold within a particular state, which essentially means that the buyer and the seller needs to be in the same state. VAT (Value Added Tax) is governed by respective state Acts. Every state has a separate and distinct VAT act reserved for their state.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered over 3 years ago

VAT AND SERVICE TAX ` Service Tax is a form of indirect tax imposed only on services provided. Service Tax is governed by Finance Act, 1994 VAT (Value Added Tax) is a form of indirect tax imposed only on goods sold within a particular state, which essentially means that the buyer and the seller needs to be in the same state. VAT (Value Added Tax) is governed by respective state Acts. Every state has a separate and distinct VAT act reserved for their state. Thanks

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CHITRANJAN AGARWAL answered over 3 years ago

Dear Uma, 1) Vat is applicable on sale and purchase of goods, while service tax is applicable on service. 2) vat is collected and retained by the state govt while service tax collected and retained by the central govt. 3) vat is an state tax and service tax is central tax. 4) vat rate is vary b/w 1-20% as per item and state while service tax applicable @ 14% in full country. 5)VAT (Value Added Tax) is governed by respective state Acts while Service Tax is governed by Finance Act, 1994. Any other query feel free to contact us Writer CA Chitranjan Agarwal

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