HIRING GOODS TO USE

This query is : Resolved

JAVED SHEIKH (Querist)
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16 February 2009 A Co is giving movable goods like barges, tugs, trucks on quantity basis to B Co.

B Co then give these goods to use to C Co on monthly basis. C co has the ultimate control of these goods.

Which tax is applicable between A and B and C, Service Tax or VAT.

Kindly specify your reply with citation of exact provision and case laws if any.

thanks

javed

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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16 February 2009 Service Tax under the head "Business Support Services".

Rajesh Kumar

Rajesh Kumar (Expert)
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17 February 2009 It appears that transfer of right to use is being made with transfer of possession and control. It amounts to sale as per constitution- VAT is payale.
If there is no transfer of possession or control,service tax is payable under tangible goods service under Section 65 (105)(zzzj).

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JAVED SHEIKH

JAVED SHEIKH (Querist)
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17 February 2009 If A co is diretly giving such goods to C Co on monthly basis

OR

If A Co is giving such goods to B Co on monthly basis

then the situation will remain same or change

Rajesh Kumar

Rajesh Kumar (Expert)
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03 March 2009 One of the two- either VAT or service tax- is payable.
The exact nature of transaction is based on your private agreement.