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?
Z Ltd. Acquires Brick Plant: Depreciation Entitlement and Lease Rent Questions Arise for Assets Leased to XYZ Ltd. Z Ltd. has acquired a Fly Ash Brick Plant and intends to lease the plant and building to another company, XYZ Ltd., which will manufacture and market bricks. Z Ltd. will also supply Fly and Bed Ash for production. The queries raised include who is entitled to claim depreciation on the leased assets and whether Z Ltd. should charge lease rent and service tax. A response from a participant asks if the issue has been clarified, indicating a need for further discussion or information. (AI Summary)
TaxTMI 
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