Composite stage lighting service without transfer of possession is not a taxable transfer of right to use equipment.

Providing specialised stage lighting as a composite service did not amount to a transfer of right to use equipment under the Gujarat Value Added Tax Act, 2003 because the supplier transported, installed, operated and dismantled the equipment through its own trained staff, while the customers never obtained possession, effective control or the ability to operate the apparatus themselves. The billing reflected service charges rather than a hire arrangement, and the risk remained with the supplier throughout. On these facts, the essential element of transfer of controlled possession was absent, so the transaction was not taxable as a transfer of right to use.

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Issues: Whether the assessee's activity of providing specialised stage lighting and related equipment for events amounted to a transfer of right to use the equipment so as to be taxable under the Gujarat Value Added Tax Act, 2003.

Analysis: The arrangement was for short-duration stage lighting service, with equipment transported, installed, operated and dismantled only by the assessee's trained staff. The customers never received possession or control of the apparatus, could not operate it themselves, and the risk throughout transit and use remained with the assessee. The billing was for the composite service rendered, not for a hire of equipment. On these facts, the essential element of transfer of controlled possession and the right to use was absent.

Conclusion: The transaction did not amount to a transfer of right to use and was not taxable as such under the Gujarat Value Added Tax Act, 2003. The appeal failed and the assessee succeeded.

Ratio Decidendi: A composite service involving supply, installation, operation and supervision of equipment by the supplier, without transfer of possession or effective control to the customer, does not constitute a transfer of right to use for tax purposes.

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