Hello
I am a tax consultant and one of the client has obtained franchisee from 'just books'.
he has started the business and in turn is renting out the books to customers, so is service tax applicable on such transaction?
varsha (articled assistant) (25 Points)
19 October 2016Hello
I am a tax consultant and one of the client has obtained franchisee from 'just books'.
he has started the business and in turn is renting out the books to customers, so is service tax applicable on such transaction?
Mahendra
(Chartered Accountant)
(154 Points)
Replied 20 October 2016
It may fall under Hiring or leasing of goods, and will liable for service tax. The only issue is whether there is transfer of right to use the goods or not.
If there is transfer of right to use goods, then it will be liable for VAT.
If it is merely given right to use goods in a particlar way as per the terms, then it will fall under Licensing liable for service tax.
YOu have to check risk when the goods is in possession of the ccustomer.
Please refer to para 6.6.2 of Education Note, where CBEC has clarified on certain things, before you conclude.
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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