Supply of Tangible Goods, Service Tax

[Aitha RajyaLakshmi]

Whether Service Tax can be imposed under Supply of Tangible Goods in case where

The Aseessee procured Railway Wagons under Liberalised Wagon Investment Scheme and those Wagons are used by the Railways only for the purpose of Transportation of the Finished Goods of the Assessee. In return to that the Railways are providing 15% concession on freight to the Assessee.

Whether Service Tax can be imposed on the concession of freight treating that as the consideration under Supply of Tangible Goods.

The wagons will be used only for the purpose of the Assessee only but not for any other public

Posts / Replies

[Himansu Sha]

Sir,

This issue is pending in tribunal in as demand ofservice tax as wagon facilitation charge. The issue as understood is enumerated below

A. You procured the wagons and it belonged to you

B. As agreed by you, the wagons are provided to railways

C. Railways ,will provide the service

C. You have also provided a service by offering the wagons to railways.

D. Consideration is the discount.

I think service tax s leviable.

[Himansu Sha]

In continuation, a though discussion is needed as it is an issue in other locations.

[Aitha RajyaLakshmi]

Thank u sir,

"Offering the Wagons to Railways" It means that the Wagons are used only for the purpose of the Assessee and not for any others. That means for private purpose of the Assessee only.