Lease Agrement Income

[Guest]

Z Ltd. has purchased Fly Ash Brick Plant and wants to give the Plant along with Building to one party who can manufacture Bricks and do the marketing for the same, apart from Plant & Building comp. will provide the Fly &Bed Ash for manufacturing the  Bricks.

Now query is;
1. If comp. give the Assets on Lease to XYZ Ltd then who is entitled to claim Depreciation?
2. Z Ltd. will charge Lease Rent and have to charge Service Tax or not?

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

Depreciation entitlement and service tax treatment questioned for lease of plant and building with supplied inputs. Two legal issues: entitlement to depreciation where Z Ltd. owns the plant and building but leases use to XYZ Ltd., and whether lease rent charged by Z Ltd. for the plant and building (within an arrangement that includes provision of fly and bed ash and lessee marketing) attracts service tax as a taxable service or is excluded.