Transfer of right to use goods

Transfer of right to use goods

Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration is ‘supply of service’ – para 5(f) of Schedule II of CGST Act.

This would cover operating lease i.e. giving goods on hire.

These words were used in Central Sales Tax Act and State Vat Acts also.

Hire without transfer of right to use goods – Hire without transfer of right to use goods is ‘supply of tangible goods for use’ as defined in service tax law and GST will be payable.