Activity - Liable to service tax

[sunil mehta]

A service provider errects monsoon sheds/parking sheds,storage godowns (made out of alluminium/pvc sheets) at clients' factory or ofice pemises ,as per their needs and gives it on hire for a period ranging from 1 mth. to 12 mths. on mthly. basis or lump sum basis.The above so called errected sheds are dismantled by service provider when the hire period gets over and he takes away those sheets to his place.These sheds are not meant for any social/official/business functions.They are meant for protection from rains or parking etc purpose.There is no sale of sheds.It is purely hire of sheds. Query:1)whether the above activity is liable to service tax? 2) if yes,then under which category? 3)If hire is not liable to ser.tax, then whether errection and dismantling of temporary sheds by service provider can fall under errection,comm.installation category?

AI Summary

Temporary Shed Hire: Not Liable for Service Tax, Falls Under Operating Lease, Subject to Sales Tax Instead. A service provider erects temporary sheds for clients, which are hired for up to 12 months. The query raised concerns whether this activity is subject to service tax and under which category. One response suggested considering 'Infrastructure Support Service' under 'Business Support Service,' while another argued that the activity might be a 'transfer of right to use,' akin to an operating lease, which is subject to sales tax rather than service tax. The consensus was that operating leases are not liable for service tax, as they do not fall under the service tax category of financial services.