service tax or VAT

Dear Ashima,

It is right that u should not charge service tax on rent of a building.

the question is whether you can exclude the Lift part from the total rent of building and charge service tax ?

If at all lift rent is taxable then it s to be covered under Supply of Tangile goods Service".

For that we have to determine whether LIFT is tangible or Intengible.

Deffinatly its a tangible product.

Now the LIFT is being provided by your company along with the building . According to the provisions of the Supply of Tangible Goods Service if your company is transfering the right  to use the Equipment / Lift without transfering the actual or legal right of possession and effective control, you may charge Service tax on its monthly rent . If Lift / equipment is supplied with legal right of possession with effective control then it is treated as Deemed sale and VAT is to be charged.

Apart from the above discussion its a matter of interpritation and dispute whether the LIFT is considered as MAchinery/ Equipment for the purpose of VAT or Service TAx.

It may be possible that Lifts are considered as part of building and nothing can be charged except normal rent.

Regards