Sales tax or service tax??

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This query is : Resolved

SANJAY (Querist)

22 October 2011 Dear Experts,
Please clarify that if a company is giving its vehicles to second company on RENT without drivers and petrol expenses, then which tax is applicable sales tax or service tax ?? (Ony vehicles are given to second company on the basis of agreement, there is not any other service of goods provided AND hirer can use these vehicles without any conditions for the period as agreed).
As per sales tax it covers under Deemed sales and as per Service Tax it will cover under service of supply of tangible goods for use??
Which should be applicable.
Please reply soon!!
Thanks in advance
Sanjay Verma

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

24 October 2011 The liability depends on whether the control andpossession is given to the user. If so then VAT applicable.

SANJAY

SANJAY (Querist)

24 October 2011 Still not clear... How we give control and possession on rental basis??

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

24 October 2011 Real facts. Whether the agreement has clearly communicated that the risk in that period is with the customer. Who will drive, whether payment is only if used, who isresponsible for repairs/ maintenacne, who puts the deisel could among many other reason establish who has the control or possession ofthe vehicle.

Sundaram Kumar

Sundaram Kumar (Expert)

24 October 2011 Vat only applicable not Service Tax

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