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TMI BlogService tax and VAT at same InvoiceX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear all, i have received a bill of car rent from Telangana, they have charged service tax along with VAT. is this invoice is correct, as service tax and vat cant be charged in same invoice. please help me with this issue. Thanks - Reply By YAGAY AND SUN - The Reply = By applying the principal of effective control and possession only on Tax can be levied. - Reply By Naveen Sharma - The Reply = Dear sir, thanx for your reply, please simply state that can they charged service tax and VAT at same bill of renting a cab? - Reply By YAGAY AND SUN - The Reply = If the service provides possess the effective control then Services are being provided to you and Service Tax would be applicable. If the effective control is in your possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion i.e. you drive the cab, insurance expenses, Repair etc is undertaken by you then the cab owner will charge rent from you along with VAT. Check the facts to determine the jurisprudence of applicable Tax - Reply By Naveen Sharma - The Reply = Dear sir, Service provider is the owner of car and he is also providing driver, i am just taking service of cab from one pplace to another, now service tax is applicable and valid, but is VAT also will be charged in the same invoice. - Reply By YAGAY AND SUN - The Reply = Do not pay him VAT. - Reply By Ganeshan Kalyani - The Reply = Either VAT or Service tax can be levied but not both. - Reply By KASTURI SETHI - The Reply = Sh.Naveen Sharma Ji, In your case/situation both ST and VAT are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable as sale(Deemed Sale) and service both are involved. Look into the following extracts deeply:- M.F. (D.R.) Letter D.O.F. No. 334/1/2008-TRU, dated 29-2-2008 (Extracts) 4.4 Supply of tangible goods for use : 4.4.1 Transfer of the right to use any goods is leviable to sales tax / VAT as deemed sale of goods [ Article 366(29A)(d) of the Constitution of India ]. Transfer of right to use involves transfer of both possession and control of the goods to the user of the goods. 4.4.2 Excavators, wheel loaders, dump trucks, crawler carriers, compaction equipment, cranes, etc., offshore construction vessels barges, geo-technical vessels, tug and barge flotillas, rigs and high value machineries are supplied for use, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h no legal right of possession and effective control. Transaction of allowing another person to use the goods, without giving legal right of possession and effective control, not being treated as sale of goods, is treated as service. 4.4.3 Proposal is to levy service tax on such services provided in relation to supply of tangible goods, including machinery, equipment and appliances, for use, with no legal right of possession or effective control. Supply of tangible goods for use and leviable to VAT/sales tax as deemed sale of goods, is not covered under the scope of the proposed service. Whether a transaction involves transfer of possession and control is a question of facts and is to be decided based on the terms of the contract and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er material facts. This could be ascertainable from the fact whether or not VAT is payable or paid . It was further held that the taxable event in case of Supply of Tangible Goods Services , is the supply of goods and not their use. Affirmed by Hon'ble Supreme Court [ Commissioner v. Petronet LNG Ltd. - 2017 (47) S.T.R. J40 (S.C.) = 2016 (5) TMI 1323 - SUPREME COURT ] CESTAT's ORDER reported as 2016 (46) S.T.R. 513 (Tri. - Del.) = 2013 (11) TMI 1011 - CESTAT NEW DELHI in the PETRONET LNG LTD. Finance Act, 1994 - Section 65(105)(zzzzj) ibid - Scope of - Exclusion of transfer of possession and effective control of tangible goods - It is consistent with constitutional limitation on legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative field of Parliament - After introduction of Article 366(29A)(d) of Constitution of India such transfer of right to use goods is deemed sale liable to Sales Tax, which is within purview of State legislature. [paras 13, 24] - Reply By YAGAY AND SUN - The Reply = 2016 (1) TMI 1066 - AUTHORITY FOR ADVANCE RULINGS M/s SICPA India Pvt. Ltd. New Delhi Versus Commissioner of Service Tax, Commissioner of Trade And Taxes, Govt. of NCT of Delhi - Reply By YAGAY AND SUN - The Reply = CBEC Circular No. 198/08/2016-SERVICE TAX, Dated: August 17, 2016 - Reply By KASTURI SETHI - The Reply = M/s.YAGAY AND SUN, Dear Sirs, Board's circular and judgment quoted by you are very very useful. Difference of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion always leads to healthy discussion and healthy discussion leads to excellent results. And thus querist gets best service. Really indebted to you for sharing your knowledge on this forum . - Reply By KASTURI SETHI - The Reply = Now ball is in the court of querist. He is to decide how to proceed ahead. I make the position easier for the querist. If (i) Driver is of owner of car; (ii) Insurance of car is by owner (iii) ESI, PF deducted of driver is deducted by owner of car (iv) Repair, maintenance etc. is got done by owner (v) Petrol borne by owner of car. It means possession and effective control is with the owner of a car and service s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tands provided. Taxable event is 'supply'. VAT has been charged because deemed sale is involved as explained above. In the absence of contract or agreement, Invoice is contract as per Evidence Act. So both ST and VAT both are correctly charged. - Reply By Naveen Sharma - The Reply = Dear Kasturi sir, thanks for your valuable information and also thanks to Yagay and Sun for their knowledge. - Service tax and VAT at same Invoice - Query Started By: - Naveen Sharma Dated:- 16-2-2017 Service Tax - Got 12 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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