TaxTMI 
TaxTMI 
I want to know whether CONSTRUCTION EQUIPMMENT taken on lease at site is whether liable to Service Tax or VAT.
What conditions should be fullfilled ?
please give ruling and case study reference(s).
whether CONSTRUCTION EQUIPMENT on lease at site is liable to SERVICE TAX or VAT
18 Jan 2016 
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Leasing of construction equipment treated as service under central law; VAT may apply if effective possession and control transfers.
Under central law construction equipment leased at site is characterised as Right To Use Of Tangible Goods Services where ownership remains with the lessor and the lessee acquires a temporal right to use; Supreme Court authority has treated leasing as a service. State VAT may nevertheless treat such leases as a deemed sale if, under local law and the lease terms, effective possession and control are found to have passed to the lessee. The outcome depends on the agreement's terms, factual control and possession, and the interplay between central service taxation and state VAT regimes. (AI Summary)
Under central law construction equipment leased at site is characterised as Right To Use Of Tangible Goods Services where ownership remains with the lessor and the lessee acquires a temporal right to use; Supreme Court authority has treated leasing as a service. State VAT may nevertheless treat such leases as a deemed sale if, under local law and the lease terms, effective possession and control are found to have passed to the lessee. The outcome depends on the agreement's terms, factual control and possession, and the interplay between central service taxation and state VAT regimes. (AI Summary)