applicability of service tax

[Guest]

Dear sir,

   I would like to know the rule position regarding applicability of Service Tax for hiring of tractors for disposal of garbage in health and sanitation section.

urs

chakravarthy.

[Brijesh Verma]

You need to first provide us the info about effective control and possession of such vehicles.

In case effective control has been passed on... then VAT is applicable otherwise ST is applicable. 

AI Summary

Effective control determines tax treatment: transfer of control attracts VAT, retention of control attracts service tax. Applicability of tax on hiring tractors for garbage disposal turns on whether effective control and possession of the vehicles pass to the hiring party; if control passes, VAT applies as a supply of goods or hire, whereas if control remains with the provider the activity is a service chargeable to service tax.