04 May 2012
we have given a machine on lease. it comes to our knowledge that it is a transfer of right to use hence it attracts both sale tax and service tax. please tell me whether it is true and if true on what amount sale and service tax will be levied and the tenant can claim the input vat of it. the transaction is in uttar pradesh ie both lessee and lessor are in up and manufacturing company.
07 May 2012
If the transaction comes under the purview of transfer of right to use as laid down under the Constitution as well as under the local VAT laws and the AP HC Lamba & Co. guidelines, then ONLY VAT is applicable. This is not a works contract and a portion is not subjected to service tax thereon.
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