service tax on renting of genset

[satbir singhwahi]

genset is rented to clients and receipts are more than 20 lacs , whether service tax ia applicable as service is of producing electricity.

[Mahir S]

Herein , you are looking for exemption under the Negative List pertaining to Transmission or distribution of electricity .However, the said exemption is available only to an electricity transmission or distribution utility.

Hence, if your client is not falling under the category of electirity transmission or distribution utility, then he is liable to pay service tax thereon.

[YAGAY andSUN]

The principal of effective control would apply in this matter.  If your company have the effective control on the GEN Set, then, service tax would be applicable. If the client/customer has the effective control then VAT would be applicable under Right to use (i.e. Deemed Sales).

But you would not get any exemption in this matter as your company is not in the business of transmission or distribution of electricity.

AI Summary

Service tax on rented genset applies where lessor retains effective control; otherwise VAT may arise as deemed sale. Service tax applies to renting a genset where the provider is not an electricity transmission or distribution utility; the transmission/distribution exemption is limited to bona fide utilities. The applicable tax regime depends on the effective control test: retained effective control yields a taxable service (service tax), while customer control may convert the transaction into a deemed sale attracting VAT.