Service tax on hired one crane for our shut down work

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Manish Mehta (Querist)
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27 August 2011 We have hired one Crane(Chain Mounted)- for our Shut down work “ Crane Hiring for Equipment replacement.
Party is charging the Service tax on Crane Hire charges.

1) My Question is where the crane come under Vehicle Act.

2) Whether we can avail service tax on Crane hiring and mobilization bill charge by party

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 August 2011 Crane hire charges are liable to service tax under 'supply of tangible goods' service.
Service receiver is not entitled,in this case, to avail cenvat credit.

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Manish Mehta

Manish Mehta (Querist)
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27 August 2011 ------------------------------------------------------

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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24 July 2025 Here’s the clarification on **Service Tax on Crane Hiring** for your shutdown work:

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### 1) Does the crane come under the Vehicle Act?

* A **crane (chain-mounted or otherwise) is considered a motor vehicle under the Motor Vehicles Act** when it is used for transportation on roads.

* However, **if the crane is hired only for lifting or handling services on-site (not for road transport), it is not treated as a goods carriage** under the Service Tax law.

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### 2) Whether Service Tax is applicable on Crane Hiring and Mobilization charges? Can you avail CENVAT credit?

* **Crane Hiring is taxable under "Renting of motor vehicles service" only if the crane qualifies as a goods carriage under Motor Vehicles Act and is used for transportation of goods.**

* If the crane is hired just for lifting during shutdown work (i.e., on-site service) and not for goods transportation, **Service Tax is leviable under the category "Support services" or "Equipment hire service," but not under goods transport agency (GTA).**

* **Regarding CENVAT credit:**

* If the Service Tax is paid on Crane Hiring which is related to your business activity (like shutdown work in manufacturing), **you are eligible to avail CENVAT credit on such service tax paid**, provided the service is used for taxable output service or manufacture.

* Mobilization/demobilization charges are generally considered part of the service and attract service tax similarly.

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### Summary:

| Aspect | Position |
| ------------------------------- | ----------------------------------------------------------------- |
| Crane under Motor Vehicles Act? | Yes, if used for transportation on road; else No |
| Service tax applicability | Yes, on crane hiring service as Equipment Hire or Support service |
| CENVAT credit eligibility | Yes, if used for business/manufacturing activities |

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If you want, I can help you find the exact service tax notification or classification for crane hiring or assist in accounting treatment. Would you like that?

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