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Car rentals vat or service tax

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Querist : Anonymous

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Querist : Anonymous (Querist)
12 August 2013 Dear Experts,

Please clarify on the following.

Is Car rentals charges by the vendor is subject to VAT or Service Tax.

Car has taken as rent by company and company will pay dry rent to the car owner , petrol, driver, service and maintenance will be taken care by the company itself vendor only gets rentals on monthly basic.

Please clarify with supporting notifications/circulars if any

Regards
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
13 August 2013 1) In this case possession and control is transferred to the company. Hence VAT attracts under the respective state as deemed sales under 'right to use' of goods.

2) As a corollary to the above, clause (f) of section 66E of the Finance Act,1994 doesn't attract hence service tax can't be levied w.e.f 1.7.2012.
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