Service tax on Imported Lease goods

[Chetan Pawar]

Dear All,

We have import storage tanks on lease under Concessional rate of import duty when re-exported after use under Tariff custom notification No. 27/2002 [Cus] 1-3-2002. as we were paid the Custom duty under concessional rate. Every month the Party has given invoices in foreign currencies for lease/rent of this tanks and we have paid the same.

So my question is the same transaction are liable to pay service tax under reverse charge as in respect of any taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory

Can anyone tell me as weather we have to pay service tax or not under reverse charge, if yes then please give me the all legal correspondence for the same.

AI Summary

Reverse charge liability on cross border lease payments depends on place of provision and control over leased tanks.
Lease rentals paid to a foreign lessor for imported storage tanks can attract reverse charge service tax where the receiver is located in the taxable territory and the provider is in a non taxable territory; factual factors such as who has effective possession, control, insurance and operational responsibility for the tanks, and whether the tanks are movable (affecting classification as leasing of goods), determine whether the activity is treated as a taxable service like storage/warehousing or as a excluded/declared service. A refund of concessional customs duty may be claimable if service tax is payable.