Service Tax and VAT

[Asked by Guest]

Dear Sir,

We are in Machinery hire charges business. We gives our trucks on monthly hire basis. We have heard that Both Service Tax and VAT would be charged on this amount. Please confirm and if yes then whether VAT and ST will be charged on on 100% of amont

AI Summary

Deemed sale: VAT can apply to monthly machinery hire; service tax depends on possession and effective control.
Monthly truck hire may be treated as a deemed sale attracting VAT where the hirer obtains possession and effective control; if the supplier retains control, service tax may apply. The contract's terms on right to use, possession and effective control determine whether VAT or service tax is chargeable, and payment of one tax will generally preclude the other on the same transaction.