Service Tax Circular no 198/08/2016

[Guest]

Dear Sir

Request you to please explain in short regarding Circular no 198/08/2016 – Service Tax liability in case of hiring of goods without transfer of right to use goods.

AI Summary

Clarification on Service Tax: Hiring Goods Without Right Transfer is Taxed as Service Under Circular 198/08/2016 A discussion on a service tax forum addressed a query about Circular no 198/08/2016, concerning the service tax liability on hiring goods without transferring the right to use them. An expert clarified that such transactions are considered services, while those involving the transfer of rights are subject to state taxes like VAT. The clarification is based on a Supreme Court judgment, and it advises reviewing contract terms to determine taxability and avoid litigation. Other participants acknowledged and agreed with this explanation.