I own a furniture rental company,i wantef to know what are the service tax implications on furniture given on rent,
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Service tax on furniture given on rent
Replies (4)
Mr.Hinduja
Service tax would be paid by you as ultimate possession is in your hands,you just providing services to the customer
Rental service is a declared service. Service tax applicable at the rate of 14.5%
Service tax is applicable if right to use is not Transferred
There seems to be a lot of confusion in regard to hire- whether VAT or Service is applicable?
The law is clear that right to use is liable for CST/VAT as long as possession and effective control is with the customer. In this case the liability for furniture hire is clearly only VAT/ CST ( if interstate). Control and possession is given to the cusotmer fully for a short period.
An example could be a car given for hire which you drive and pay based on days/ month. This would be liable for VAT. If the bus comes with a driver then the efective possession and control is with the driver who is the employee of the owner of the vehcile. Therefore in such a case liability would be under service tax.
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