Service tax and VAT at same Invoice

[Naveen Sharma]

Dear all,

i have received a bill of car rent from Telangana, they have charged service tax along with VAT.

is this invoice is correct, as service tax and vat cant be charged in same invoice.

please help me with this issue.

Thanks

AI Summary

Possession and effective control determines whether car hire is taxed as service or as deemed sale, affecting tax applicability.
Applicability of service tax or VAT on car hire depends on whether the owner retains possession and effective control. If the owner provides driver and bears insurance, maintenance and related obligations, the transaction is a service liable to service tax. If both possession and effective control pass to the user, the right to use is a deemed sale liable to VAT. Characterisation is a question of fact determined from the contract and surrounding circumstances.