Catagory of Service -Reg.

[vinay wakde]

We are service provider and giving our owned Barges on hire. We are registered with Service Tax authority under service category “Supply of Tangible goods” and paying appropriate Service Tax. Though the barges are owned by us, the manpower require to run these Barges are provided by the third party.

Kindly let us know whether we are correctly paying the Service Tax  amount under service category “ Supply of Tangible goods”  or we have to pay service Tax amount under service category “Ship Management Service”.

Regards,

VINAY

[YAGAY and SUN]

According to me, "Supply of Tangible Goods" is the appropriate taxable service under which you are providing taxable services.

[Achyut Kale]

"Supply of Tangible goods" is correct.

[NEERAJ KUMAR, RANCHI]

Dear Vinay,

Kindly check who is paying the third party, If payment to the third party for running the machine is paid by your customer your services can not be defined under the category   "Supply of Tangible Goods. since as per provision supply of tangible goods  without transferring right of possession and effective control of such machinery, equipment and appliances can only be defined as  "Supply of Tangible Goods".

[NK SHETE]

 As per provision, supply of tangible goods  without transferring right of possession and effective control of such machinery, equipment and appliances can only be defined as  "Supply of Tangible Goods".

As such, in intanst case the terms and conditions in the contract of supply of barges  be clarified.

AI Summary

Supply of Tangible Goods classification matters when hiring barges; contractual control and payment for manpower determine tax treatment.
Where a supplier hires out owned barges without transferring the right of possession and effective control, the activity aligns with Supply of Tangible Goods; if the customer pays for and directs third party personnel such that operational control effectively passes to the customer, the supply may not fit that category and contract terms on payment and control should be clarified to determine correct service classification.