right to use act

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SACHIN JAIN (Querist)

02 March 2010 Sir,
I am a regd. dealer in Delhi. I make an agreement in delhi with the co. of MP to transfer right to use my machinery in MP. Now, my querries are as under:
1. Whether it is local sale or central sale.
2. If central sale can I send the goods on C form
3. When the goods will return after completion of job what will be the taxability.
4. What is the taxability if the machines are used in the sea i.e. in oil industry which is outside the limit of India.

Ca. Sachin Jain
9810170619

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)

18 April 2010 Before the amendment in CST Act (re inclusion of right to use) the position was very clear that site of the asset at the time of execution of contract will determine the state in which the sales has been executed.
After the amendment of definition of sales in section 2(g) of the CST Act, scenario is changed.I believe , being there is no altervative, section 3(a) will determine the character of this sale.And accordingly, it appears that your transaction will be well covered under CST Act.
I don't find any reason for non appliacbility of C form, if the assets is going to be used by the receiving dealer as per section 8(3). I m of the opinion that if other conditions are satisfied, your transation will be eligible for concessional rates of taxes (C form).

In my view No sales tax will be leviable for returning the assets.

I think that no tax is leviable in case the assets has been sent to out-side the territory of India.

I will welcome the different opinions on this issue.

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