Supply of Computer Hardware on Hire is ‘Transfer of Right to Use’, Not ‘Supply of Tangible Goods’:...

The Calcutta High Court has quashed a service tax demand, ruling that supply of computer hardware on hire is "transfer of right to use, not supply of tangible goods." This crucial distinction impacts taxability. A "transfer of right to use" is typically subject to VAT/GST, whereas "supply of tangible goods for use" might attract service tax or a different GST classification. The court's decision clarifies that when hardware is provided on a rental basis without transfer of ownership, it falls under the "right to use" category, thus freeing it from the specific service tax demand.