30 April 2013
such transactions normally covered under operating lease, and hence a declared service and taxable. 66E(f)
operating lease : Operating lease is a contract between the lessor and lessee such that the cost of the asset is not fully recovered from a single lessee. This means that the period of the lease will be shorter since the lessor will recover the cost of the asset from multiple lessees. Repair and maintenance of the asset is the lessor's responsibility.
1) If Control of such goods is transferred to the lessee: Such transaction attracts levy of VAT/CST. Eg: Hire of chairs etc
2) If Control of such goods is retained by lessor: Such transaction attracts levy of Service Tax. Eg: hire of machinery with operator. Where operator is the employee of the lessor
B) Renting of immovable property – attracts levy of service tax
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