Crane hire contract treated as service, not transfer of the right to use goods, because control stayed with supplier.

A crane-hiring arrangement was examined on its substance to determine whether it amounted to a transfer of the right to use goods and a deemed sale under the Rajasthan Value Added Tax Act and Article 366(29A) of the Constitution. The contract required the supplier to provide the crane with a driver and helper, carry out repairs and maintenance, and maintain the log book, while the recipient was entitled only to loading, unloading, lifting and shifting services. Because the recipient did not obtain exclusive control or possession of the crane, the essential attributes of a transfer of the right to use goods were absent. The arrangement was therefore a contract of service and not a deemed sale.

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Issues: Whether the crane arrangement under the contract dated 13.10.2008 amounted to a transfer of the right to use goods and a deemed sale under Section 2(35)(iv) of the Rajasthan Value Added Tax Act, 2003 read with Article 366(29A) of the Constitution of India.

Analysis: The contract was examined as a whole to determine its substance and dominant nature. The arrangement required the assessee to supply the crane with a driver and helper, to undertake repair and maintenance, and to maintain the log book during the contract period. The consumer was entitled only to the specified services of loading, unloading, lifting and shifting, and did not obtain exclusive control or possession of the crane. On these facts, the essential attributes of a transfer of the right to use goods were absent.

Conclusion: The arrangement was a contract of service and not a transfer of the right to use goods; therefore, it did not constitute a deemed sale under the statute.

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