Claim of capital goods

[madhavvan n]

company has taken registration under tangibale goods supply since under mvat any lease is liable for vat it charges vat and since it falls under service tax provisions is it liable to service tax can it claim credit of cgoods inputs and input service

[Madhukar N Hiregange]

Condition for coverage under VAT is where the control and possession of the goods are handed over. Under ST where the control and possession is with the owner then there is a liability. In such cases the cenvat credit on the cpaital goods ( other than Motor Veh)+ input services + inputs used in provding the service would be available.

AI Summary

Control and possession determines tax liability; owner retention triggers service tax and allows CENVAT credit on eligible inputs.
Whether a lease attracts VAT or service tax depends on control and possession: transfer of control to the lessee triggers VAT, whereas retention of control by the owner makes it a taxable service, allowing CENVAT credit on capital goods (other than motor vehicles), inputs and input services used in providing the service.