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May 2013

Pandals, Shamiana liable to tax-clarification Circular No. 168/3 /2013 – ST dated 15 04 2013

By Tarun Ghia, Brijesh Cholera, Pratik Mehta, Chartered Accountants
Reading Time 1 mins
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The CBEC clarified that the activity by way of erection of pandal or shamiana is a declared service under Section 66E 8(f) of the Finance Act, 1994.

It is further clarified that for a transaction to be regarded as “transfer of right to use goods”, the transfer has to be coupled with possession. Court rulings have upheld that when the effective control and possession is with the supplier, there is no transfer of right to use. It is a service of preparation of a place to hold a function or event & effective possession and control over the pandal or shamiana remains with the service provider, even after the erection is complete. Accordingly, services provided by way of erection of pandal or shamiana would attract the levy of service tax.

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