FG on Renting

[Srivatsan Krishnamachari]

Dear Sirs,

Ours has finished goods of Pre-fab buildings. We received an order our products for (FG) renting purpose and returned back once the work is completed. What is the procedure need to fallow in relation to Excise/Service tax to avoid audit complications.

Thanks for your support

Regards

Srinivas

AI Summary

Tax treatment of renting finished goods: excise permission for removals and service tax applies to rental receipts.
Movement of finished goods out of factory premises for temporary external use requires excise department permission to avoid duty on removal; otherwise the transfer may be a dutiable clearance. Charges for supplying tangible goods on rent are liable to service tax as provision of services. A practical alternative is to transfer cleared goods to a trading firm on payment of duty, which would then supply the goods on rent, thereby segregating excise and rental service tax obligations.