ST not leviable on supply of gensets for short period as it amounts to deemed sales

Subhash Light House Vs Commissioner, Central Goods & Service Tax (CESTAT Delhi)

ST not leviable on supply of gensets for short period as it is amounts to deemed sales

The CESTAT, New Delhi in M/S Subhash Light House v. Commissioner, Central Goods & Service [Service Tax Appeal No. 50176 of 2019 Tax, Audit-II dated February 02, 2022] held that the gensets were made available for delivery to the clients as per the agreement between the assessee and the clients that gave clients legal right to use such gensets as agreed upon between the assessee and the clients; and the assessee cannot transfer the gensets to any other client during the period of agreement. Thus, the supply of gensets is to be considered as sale of goods in terms of Article 266(29A) of the Constitution of India and no Service tax is payable on the same.

Facts:

M/s Subhash Light House (“the Appellant”) is engaged in the business of supply of generator sets on rental basis to their clients in two manners i.e., supplying fixed gensets to the clients and installing the same in the premises of the clients and the second where the clients require transportable mobile gensets for a shorter period such gensets were fixed in vehicles and which was under the provisions of VAT or Sales Tax considering the same as ‘deemed sales’ in terms of Article 366(29A) of the Constitution of India and VAT/Sales Tax was paid on the consideration received by the Appellant.

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