VAT @ 75 % on Line Amount and Service Tax

Hi Guys,

I am using NAV 2009 RTC ( SP1), we have one pecuilar scenario related to sub contractor.

The entire scenario is as follows:- Our client send material to contractor for some processing work.

In that process contractor use his own material in order to complete work.

Contractor raise his invoice with VAT + Service tax. In this case VAT is being calculated on the 75% of line amount.

And service tax is being calculated on the basis of ( Base amount + VAT calculated on 75% of amount)

e.g. If Line Amount ( Rs.) = 100

VAT @ 5% ( Rs. 75 ) = 3.75

Service Tax @10.3 ( 100 + 3.75) = 10.69

Total = 114.44

Please guide me how to handle this type of transactions.

As per VAT rule contractor can charge VAT on 75% of amount.

If anyone have solution then please let me know ASAP.




Have u got any solution for the above mentioned problem. I am also facing the same scenarioin organization. Kindly suggest the solution…