Is VAT applicable on renting a movable item/equipment?
This query is : Resolved
30 January 2009
Hello! Everybody,
Can anyone give notification/circulars on the following in Andhra Pradesh:
Our company provide a tanker on hire/rent basis to a customer on day/week/monthly basis, which is movable item, based on the customer requirement, who'll issue an order for the same.
Is this transaction comes under sales tax?
If comes, under which schedule? Give the notification/circular number. And also prove the rate of tax?
Thanks
Can anyone give notification/circulars on the following in Andhra Pradesh:
Our company provide a tanker on hire/rent basis to a customer on day/week/monthly basis, which is movable item, based on the customer requirement, who'll issue an order for the same.
Is this transaction comes under sales tax?
If comes, under which schedule? Give the notification/circular number. And also prove the rate of tax?
Thanks
30 January 2009
yes giving tanker on hire / rent basis amounts to sale and attracts tax
31 January 2009
Thanks Mr. Vasanth D Jaganath
Shall we collect VAT and pay to the department?
What is the rate of tax for this? please.
Whether we've to collect 4% or 12.5% VAT?
Shall we collect VAT and pay to the department?
What is the rate of tax for this? please.
Whether we've to collect 4% or 12.5% VAT?
01 August 2024
In Andhra Pradesh, VAT (Value Added Tax) on renting or hiring out movable items such as tankers can be a bit nuanced. Here’s a detailed overview:
### **1. Applicability of VAT on Renting Movable Items**
**VAT on Rental of Movable Goods:**
- **Rental of Movable Goods:** Renting out movable equipment or items, such as tankers, is generally considered a service rather than a sale of goods. However, some states include such rentals under VAT or Sales Tax laws, treating them as deemed sales or services.
**Andhra Pradesh VAT Law:**
- **AP VAT Act:** Under the Andhra Pradesh Value Added Tax Act, renting of movable goods was traditionally considered taxable. The treatment might differ based on the nature of the item and the rental agreement.
### **2. Relevant Notifications/Circulars:**
**Notifications/Circulars:**
- **Notification Reference:** For the specific applicability of VAT on the rental of movable items like tankers, you should refer to Andhra Pradesh VAT notifications or circulars issued by the State Government's Commercial Taxes Department. These can be found on the official Andhra Pradesh Commercial Taxes website or by contacting local tax authorities.
### **3. VAT Rate and Collection:**
**VAT Rate:**
- **VAT Rate on Rentals:** Historically, the VAT rate on the rental of movable goods could range from 4% to 12.5%, depending on the specific nature of the transaction and local regulations. For instance, movable items like machinery might attract different VAT rates compared to other items.
- **4% or 12.5% Rate:** To determine the exact rate, check the latest VAT notifications or circulars issued by the Andhra Pradesh Government. As per historical norms, 4% was applied for certain types of rentals, but this may have changed with new tax laws or amendments.
### **4. Recommendations:**
**Steps to Follow:**
1. **Verify Latest Notifications/Circulars:**
- **Check Official Sources:** Look for the latest VAT notifications or circulars from the Andhra Pradesh Commercial Taxes Department regarding the rental of movable goods. These documents will provide precise information on tax applicability and rates.
2. **Consult Tax Authorities:**
- **Contact Local Authorities:** For accurate guidance, contact local tax authorities or a professional tax consultant who can provide current information and ensure compliance with VAT laws.
3. **Collect and Remit VAT:**
- **VAT Collection:** If applicable, collect VAT from customers based on the determined rate (either 4% or 12.5%) and remit it to the state government as per the guidelines.
### **Additional Information:**
- **AP VAT Act & Rules:** Review the Andhra Pradesh VAT Act and associated rules for specific details on taxable services and items. These documents provide detailed insights into various schedules and tax rates.
- **Updated Tax Laws:** VAT laws and rates can frequently change. Ensure that you are referring to the most recent legal documents or consulting with a tax professional to stay updated.
By following these steps, you can ensure that your company is compliant with VAT regulations related to the rental of movable items like tankers.
### **1. Applicability of VAT on Renting Movable Items**
**VAT on Rental of Movable Goods:**
- **Rental of Movable Goods:** Renting out movable equipment or items, such as tankers, is generally considered a service rather than a sale of goods. However, some states include such rentals under VAT or Sales Tax laws, treating them as deemed sales or services.
**Andhra Pradesh VAT Law:**
- **AP VAT Act:** Under the Andhra Pradesh Value Added Tax Act, renting of movable goods was traditionally considered taxable. The treatment might differ based on the nature of the item and the rental agreement.
### **2. Relevant Notifications/Circulars:**
**Notifications/Circulars:**
- **Notification Reference:** For the specific applicability of VAT on the rental of movable items like tankers, you should refer to Andhra Pradesh VAT notifications or circulars issued by the State Government's Commercial Taxes Department. These can be found on the official Andhra Pradesh Commercial Taxes website or by contacting local tax authorities.
### **3. VAT Rate and Collection:**
**VAT Rate:**
- **VAT Rate on Rentals:** Historically, the VAT rate on the rental of movable goods could range from 4% to 12.5%, depending on the specific nature of the transaction and local regulations. For instance, movable items like machinery might attract different VAT rates compared to other items.
- **4% or 12.5% Rate:** To determine the exact rate, check the latest VAT notifications or circulars issued by the Andhra Pradesh Government. As per historical norms, 4% was applied for certain types of rentals, but this may have changed with new tax laws or amendments.
### **4. Recommendations:**
**Steps to Follow:**
1. **Verify Latest Notifications/Circulars:**
- **Check Official Sources:** Look for the latest VAT notifications or circulars from the Andhra Pradesh Commercial Taxes Department regarding the rental of movable goods. These documents will provide precise information on tax applicability and rates.
2. **Consult Tax Authorities:**
- **Contact Local Authorities:** For accurate guidance, contact local tax authorities or a professional tax consultant who can provide current information and ensure compliance with VAT laws.
3. **Collect and Remit VAT:**
- **VAT Collection:** If applicable, collect VAT from customers based on the determined rate (either 4% or 12.5%) and remit it to the state government as per the guidelines.
### **Additional Information:**
- **AP VAT Act & Rules:** Review the Andhra Pradesh VAT Act and associated rules for specific details on taxable services and items. These documents provide detailed insights into various schedules and tax rates.
- **Updated Tax Laws:** VAT laws and rates can frequently change. Ensure that you are referring to the most recent legal documents or consulting with a tax professional to stay updated.
By following these steps, you can ensure that your company is compliant with VAT regulations related to the rental of movable items like tankers.
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