Service Tax Liability in case of Machinery hire charges
This query is : Open
12 November 2009
One of my claint receiving machinery hire charges Rs.1 crore per annum. Is it taxable under service tax and in in which category it is taxable.kindly clarify it.
12 November 2009
after 16.5.2008 is taxable.
Eg; The machinery/ equipment is transfered along with the operator. This is example of transfer of goods without transfering right of possession and effective control.
Eg; The machinery/ equipment is transfered along with the operator. This is example of transfer of goods without transfering right of possession and effective control.
13 November 2009
Sir! Kindly clarify Service tax and VAT both are payable on Machinery hire charges. Sales department is also collecting VAT on Machinery hire charges. Actually we have to pay one tax either service tax or VAT.
13 November 2009
Please review the text of the service category "Supply of Tangible Goods Serviice" for the said Taxable services provided or to be provided on or after 16.5.2008.
The terms of arrangement would need to be evaluated since levy of VAT or Service tax on supply of machinery on hire/ rent would depend on the nature of the Transfer of such machinery.
The Renting of the machinery may be termed as transfer of right to use. But if the transfer of right to use involves transfer of both possession and control of the goods to the user then the state government may charge VAT on such activity as this is construed as deemed Sale.
In case machinery is supplied for use without legal right of possession and effective control it shall be treated as a Service.
Eg; The machinery/ equipment is transferred along with the operator. This is example of transfer of goods without transferring right of possession and effective control.
Your client may evaluate arrangements accordingly
The terms of arrangement would need to be evaluated since levy of VAT or Service tax on supply of machinery on hire/ rent would depend on the nature of the Transfer of such machinery.
The Renting of the machinery may be termed as transfer of right to use. But if the transfer of right to use involves transfer of both possession and control of the goods to the user then the state government may charge VAT on such activity as this is construed as deemed Sale.
In case machinery is supplied for use without legal right of possession and effective control it shall be treated as a Service.
Eg; The machinery/ equipment is transferred along with the operator. This is example of transfer of goods without transferring right of possession and effective control.
Your client may evaluate arrangements accordingly
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Treatment of Pension ?annuity returns on PMVY
- TAN for Partnership
- Last year TDS Claim
- AY 26-27 ITR-4 FILING U/S 44-ADA
- Plot of land. Cost of Acquisition
- Long Term Service award taxability in hands of company
- Soyabean hsn code and gst rate
- CA IPCC Registeration in 2012, Is my registration Active or Expired
- Free lancer income
- LTCG for Assmt year 26-27
- Gst invoice numbering and delivery challan numbering
- Standard Deduction claim for EPFO Pension and ICICI Prudential Life Annuity
- Small dealers gst returns filing
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- Nomination of Bank for refund in itr 2
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
