Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: TDS :: form 3cd :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: empanelment :: VAT RATES :: cpt
 
 
Service Tax »
 India to levy service tax on freight for imports on delivered basis
 Income tax relief must be blended with additional tax measures
 9th GST Council inks breakthrough on dual control over tax payers, rollout deferred to July 1, 2017
 GST rollout uncertainty hits Budget 2017 calculations
 GST now set for July 1 roll-out, dual control hurdle finally over
 Grant of Registration under DVAT and CST
 Do not raise service tax, says Chamber
 Excise, service taxpayers to migrate to GST portal by Jan 31
 Centre, state governments work on formula for 'GST on high seas'
 What is service tax?
 Tax to bring transparency, benefit companies operating in state, says Gujarat CM Vijay Rupani

SC gets service tax on leasing services
October, 28th 2010

The Supreme Court has held that banks and financial institutions, including non-banking financial companies, are liable to pay service tax on transactions of leasing and hire purchase of moveable goods.

While bringing such services within the service tax net, a Bench headed by chief justice SH Kapadia has upheld the levy of service tax on hire purchase and leasing transactions, notwithstanding that the same transactions are chargeable to the sales tax (now VAT).

The decision in effect has upheld the double taxation of the same transaction of hire purchase and leasing to both the service tax as well as the VAT.

These are services rendered to their customers which comes within the meaning of the expression taxable services... the taxable event under the impugned law is the rendition of service. The impugned tax is not on material or sale. It is on activity/service rendered by the service provider to its customer, the court said.

It further added that as far as the taxable value in case of financial leasing including equipment leasing and hire-purchase is concerned, the amount received as principal is not the consideration for services rendered. Such amount is credited to the capital account of the lessor/hire-purchase service provider.

It is the interest/finance charge which is treated as income or revenue and which is credited to the revenue account. Such interest or finance charges together with the lease management fee/processing fee/documentation charges are treated as considerations for services rendered and accordingly they constitute the value of taxable services on which service tax is made payable, the judgement stated.

The decision has come on a batch of petition led by Association of Leasing & Financial Service Companies which alleged that the service tax imposed by Section 66 of the Finance Act 1994 on the value of taxable services referred to in sections 65(105)(zm) and 65(12) relating to financial leasing services including equipment leasing and hire purchase was beyond the legislative competence of Parliament by virtue of Article 366(29A) of the Constitution.

The firms said that when sales tax was already paid for the transfer of the right to use the goods particularly when such transfer is a deemed sale, it is not open to Parliament to impose service tax on the same transaction once again.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions