Applicability of upvat
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 November 2012
dear all,
plz clarify my doubt regarding an issue:
purchased a crane for giving it on hire and charging service tax too on invoice. but whether i m also covered under right to use of goods and liable to charge VAT on the invoice amount....
urgent
plz clarify my doubt regarding an issue:
purchased a crane for giving it on hire and charging service tax too on invoice. but whether i m also covered under right to use of goods and liable to charge VAT on the invoice amount....
urgent
02 December 2012
Mr Author,
It depends on how you offer the services of your vehicle.If you are using it only for short durations,driven by your man,maintain youself and use your fuel and oil, then the earnings will be hire charges and exempt from VAT. If you hand over the crane to somebody under an agreement,to be used by themselves as they want,doing things like fuelling,maintenance,insurance,driving,and paying on daily/hourly basis, then it becomes leasing and taxable under VAT...MJK
It depends on how you offer the services of your vehicle.If you are using it only for short durations,driven by your man,maintain youself and use your fuel and oil, then the earnings will be hire charges and exempt from VAT. If you hand over the crane to somebody under an agreement,to be used by themselves as they want,doing things like fuelling,maintenance,insurance,driving,and paying on daily/hourly basis, then it becomes leasing and taxable under VAT...MJK
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 December 2012
thanks mr MJK.... now in regard to your reply i m telling you the T&C of contract.
acc to contract crane has been handed over to the party to be used by themselves as they want but driving,maintenance and insurance will be done by me. and fueling cost will be bourne by them and i will be charging on hourly basis plus service tax.
moreover my operator will be operating crane as per the specifications of the company.
so in my opinion this is chargeable to VAT also.
m totally confused. plz help me out.
thanks
acc to contract crane has been handed over to the party to be used by themselves as they want but driving,maintenance and insurance will be done by me. and fueling cost will be bourne by them and i will be charging on hourly basis plus service tax.
moreover my operator will be operating crane as per the specifications of the company.
so in my opinion this is chargeable to VAT also.
m totally confused. plz help me out.
thanks
04 December 2012
Mr Author,
The crux of the matter is who controls the crane.Just like a taxi or a bus :a passenger only uses it without any control over it,then it is hiring.likewise, many a times cranes,dozers,jcbs are called upon to do some work and return,which will also be hiring.Some times vehicles are taken on a contract basis for longer period e.g. schools hiring buses for an entire year,mines hiring cranes and jcbs for their work for long under an agreement become leasing transactions. Here two points are to be noted 1)making an agreement for long term service 2) handing over the vehicle completely to the user become leasing and taxable.When your man drives,maintenance and insurance is yours and no agreement then it can be taken as hiring and non-taxable....MJK
The crux of the matter is who controls the crane.Just like a taxi or a bus :a passenger only uses it without any control over it,then it is hiring.likewise, many a times cranes,dozers,jcbs are called upon to do some work and return,which will also be hiring.Some times vehicles are taken on a contract basis for longer period e.g. schools hiring buses for an entire year,mines hiring cranes and jcbs for their work for long under an agreement become leasing transactions. Here two points are to be noted 1)making an agreement for long term service 2) handing over the vehicle completely to the user become leasing and taxable.When your man drives,maintenance and insurance is yours and no agreement then it can be taken as hiring and non-taxable....MJK
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