Hire Purchase Company

This query is : Resolved

Krishna Murthy (Querist)
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11 August 2008 Dear Sir,

1. Is a Hire purchase company liable for service tax? If so what are the amounts chargable to tax?

2. Can a partnership firm be floated for making hire purchase business? What are the formalities required for floating Hire Purchase Business?

Vineet Bansal

Vineet Bansal (Expert)
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18 August 2008 in case of Higher Purchase agreements, VAT/CST will be charged not service tax. W.e.f. 16.5.8 service tax will be charged if a tangible asset is given for use without transferring the effective control. In case of Higher Purchase of a tangible assets if effective control is also transferred the it will come under the definition of Sale because the definition of sale includes " Transfer of right to use goods" and thus sales tax will be chrged.