DG on rent - Applicability of service tax or vat

[Asked by Guest]

1. When we give DG on Rent or Hire to Other party t5han it will cover under Service tax ? If yes, than which service we will cover this. 2. It it is not covered under Service tax,than we will charged VAT as rights to use give to other party like we will hire equipment Dumper , Payloder ? It yes than what is the Rate of VAT.

[sudhir V S]

Hiring of DG set in the nature of operating lease is not covered under Service Tax it will be subject to VAT as the deemed sale (right to use) The VAT rate will be applicable as per the schedules of the respective state VAT Act.

AI Summary

Right to use: hiring of DG sets treated as VAT-applicable deemed sale, not subject to service tax.
Hiring a DG set under an operating lease is not covered by service tax and is to be treated as a transfer of the right to use goods, attracting VAT as a deemed sale. The applicable VAT rate and schedule must be determined from the relevant State VAT Act provisions rather than under service tax rules.