Service tax liability in case of hiring of goods without the transfer of the right to use goods

Transfer of right to use determines tax character: contract terms must show exclusive right to use to attract service tax.

Service tax liability for hiring, leasing or licensing of goods hinges on whether the contract effects a transfer of the right to use goods; if not, such supply is a declared service. Apply the Supreme Court criteria: goods available for delivery, consensus on identity, transferee's legal right to use (with permissions), exclusivity of that right vis-a -vis the transferor for the period, and inability of the owner to re-transfer the same right. Distinguish financial versus operating leases and dry versus wet leases as factual indicators; examine contract terms rather than assume generalisations.