Service tax applicability on renting cranes for metro rail work

[Shivam Gaur]

Dear experts,

Kindly provide your precious views over applicability of service tax on the contract where a party has agreed to provide cranes for fixing barricades to metro corporation. The contract provides for minimum barricading to be put, and contract is for piece meal rate, however also states that even if party does not put minimum barricades to place, it will still be paid minimum prescribed amount.

Can this be claimed as exempt from service tax?

This case is of 2015-16

AI Summary

Service Tax Applies to Crane Rental Contracts for Metro Rail Work Under Section 65(105)(zzzzj) and Section 66 E(e) of Finance Act. A discussion on a forum addressed the applicability of service tax on a contract involving the rental of cranes for metro rail work. The contract stipulated a minimum number of barricades to be erected, with payment guaranteed even if the minimum was not met. An expert clarified that this service falls under 'Right to Use of Tangible Goods Services' as per Section 65(105)(zzzzj) of the Finance Act, and no exemption from service tax is available. The service is also subject to tax under Section 66 E(e) for declared services, involving obligations to act or tolerate situations.