Service tax on rent of photocopier machine

This query is : Resolved 

(Querist) 08 April 2013

Dear Sir

We have a photocopier machine and paying Rs.6000/- P.M. charges for that.
Provider is charging 12.36% service tax on Rs.6000/-.

Pls reply is it ok or not.

CA Krunal (Expert) 08 April 2013

The important determining factor is whether possession and control of photocopying machine is parted ?

If answer to above is yes then it is case of "transfer of right to use goods" which is chargeable to VAT and as per Service tax provision if VAT is chargeable on any activity no Service tax is chargeable.

Satish Kumar (Querist) 08 April 2013

Dear Sir

Provider is not charging Vat but charging service tax @ 12.36%.
Pls suggest can we pay the service tax to provider or not.

also confirm if there is any liability of service tax payment of ours (recipient) or not?

Satish Kumar (Querist) 09 April 2013


Pls confirm
Satish Kumar

CA Krunal (Expert) 09 April 2013

Technically he should charge VAT only provided he falls within turnover criteria.

However this legal position is not much aware - hence he is charging service tax.

Once he charges VAT there is no need to charge service tax.

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