computation of service tax on equipment leasing, Service Tax

[JAGANATHAN KUMARAVEL]

Please let me know whether serive tax has to be levied on the equipments leased by a manufacturing company to its associate Company.  Iin the State of Karnataka VAT is being charged on the  Lease Rental ( Depn+Int charges)

If service tax is applicable  what is the abatement available.  

 

Posts / Replies

[Rajitha manish]

If transfer of possession/control does not exist, service tax will apply under the category of 'Supply of Tangible Goods Service'. Please refer Ministry's Circular/Letter D.O.F.No 334/1/2008-TRU dated 29.2.2008. In cases of transfer of possession/control in such leasing transactions, only VAT will be applicable.

[pradeep khatri]

if there is no transfer of possession or effective control by the service provide then service tax would not be applicable only VAT will be applicable.