Please let me know whether serive tax has to be levied on the equipments leased by a manufacturing company to its associate Company. Iin the State of Karnataka VAT is being charged on the Lease Rental ( Depn+Int charges)
If service tax is applicable what is the abatement available.
Clarification on Service Tax for Leased Equipment: Transfer of Possession/Control Determines Applicability per Ministry Circular. A query was raised regarding the applicability of service tax on equipment leased by a manufacturing company to its associate company in Karnataka, where VAT is charged on lease rentals. Two responses clarified that if there is no transfer of possession or control, service tax applies under 'Supply of Tangible Goods Service' as per a specific Ministry Circular. However, if possession or control is transferred, only VAT is applicable. The discussion emphasized the importance of determining the transfer of possession/control to ascertain the correct tax liability. (AI Summary)
TaxTMI 
TaxTMI 
