Rental charges for cylinders and bottles :
In Industrial Oxygen v. State of AP (1992) 86 STC 539 (AP HC), it was held that sales tax can be levied on hire charges for cylinders (as it is ‘transfer of right to use goods’) – view confirmed in State of Orissa v. Asiatic Gases (2007) 7 VST 531 = 5 SCC 766 (SC) [reversing decision in Asiatic Gases v. State of Orissa (2001) 121 STC 405 (Ori HC)].
In North East Gases v. State of Assam (2004) 134 STC 249 (Gau HC), rent was payable if cylinders were kept beyond a period of 15 days. Hence, it was held that it is transfer of right to use goods and hence taxable.
In Hindustan Coca Cola Beverages P Ltd. v. State of Andhra Pradesh (2013) 61 VST 393 (AP HC DB), assessee was selling soft drinks under a brand name. He was also charging rent of crates and bottles (which were returnable). It was held that it is transfer of right to use goods and Vat is payable – same view in Hindustan Coca Cola v. CST (2016) 54 GST 46 = 66 56 (CESTAT).
In Hindustan Coca Cola Beverages P Ltd. v. State of Andhra Pradesh (2013) 61 VST 393 (AP HC DB), it was held that the rental charges are not part of value of soft drink for purpose of Vat.