19 November 2008
Leasing of machinery comes under Right to use and it shall be taxed under TN VAT or erstwhile TNGST Act. Basic ingredients in this right to use concept is there is no transfer of assets but only right to use the Machinery is given. In other words, transfer of possession and not transfer of ownership. If the control of the machinery, for example, if machinery is operated by a person belonging to Lessor organisation, then no right to use is attracted. To make it clear, when you take a hired car, if a driver is provided by the Cab, then no right to use. If you take a car on rent and if the cab does not provide driver, then Right to Use is attracted.
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