- The Supreme Court ruled that hiring vehicles or cranes without transferring control is a service, not a sale
- This exempts such transactions from VAT or Sales Tax but subjects them to service tax
- The case involved agreements between contractor K.P. Mozika and companies ONGC and IOCL
- The Gauhati High Court initially ruled these transactions as sales taxable under VAT
- The Supreme Court overturned this, classifying the transactions as services
- The ruling was based on the criteria from the Bharat Sanchar Nigam Limited v. Union of India case
- The criteria include availability of goods for delivery, mutual agreement on goods identity, legal right for the transferee to use the goods, exclusive right of use for the transferee, and non-transferability of the same rights by the owner during the contract period
- The Supreme Court’s decision clarifies the tax implications of similar transactions in the future
Source: taxscan.in
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
