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Service tax on furniture given on rent

Rrajesh Hinduja (proprietor) (24 Points)

28 November 2015

I own a furniture rental company,i wantef to know what are the service tax implications on furniture given on rent,

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4 Replies

CA Mohit Kumar (accounts,taxation) (855 Points)
Replied 28 November 2015

Mr.Hinduja Service tax would be paid by you as ultimate possession is in your hands,you just providing services to the customer

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Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 28 November 2015

Rental service is a declared service. Service tax applicable at the rate of 14.5%

Ikesh Nagpal (Ca firm) (77 Points)
Replied 30 November 2015

Service tax is applicable if right to use is not Transferred

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 02 December 2015

There seems to be a lot of confusion in regard to hire- whether VAT or Service is applicable?

The law is clear that right to use is liable for CST/VAT as long as possession and effective control is with the customer. In this case the liability for furniture hire is clearly only VAT/ CST ( if interstate). Control and possession is given to the cusotmer fully for a short period.

An example could be a car given for hire which you drive and pay based on days/ month. This would be liable for VAT. If the bus comes with a driver then the efective possession and control is with the driver who is the employee of the owner of the vehcile. Therefore in such a case liability would be under service tax.