Lease agreement
This query is : Resolved
06 March 2018
Dear Sir,
We have purchased 5 truks for transporation of our finished goods to our party point . Now we have decided to lease out the trucks to a transporter . Who will pay all the expense relating to the trucks like payment of EMI, truk driver salary , truck running exp.
Now my question is how to deal with this case ?
I am thinking that we should charge from him the lease rental and he will charge from us the transport freight .
Pls advise
We have purchased 5 truks for transporation of our finished goods to our party point . Now we have decided to lease out the trucks to a transporter . Who will pay all the expense relating to the trucks like payment of EMI, truk driver salary , truck running exp.
Now my question is how to deal with this case ?
I am thinking that we should charge from him the lease rental and he will charge from us the transport freight .
Pls advise
06 March 2018
The transaction that you are referring to is largely like Sale and Lease back. In such cases, the essence of the transaction is of importance. If all the EMI and salaries are being paid by them, then additionally it will be appropriate to evaluate the other conditions like whether at the end of the lease period, you will be selling the truck to them or otherwise. If majority of such conditions are met, then it can be classified as finance lease wherein the asset will be capitalised in the books of the lessee.
From commercial point of view, it may be appropriate to charge lease rental and the lessee charges the transport freight.
From commercial point of view, it may be appropriate to charge lease rental and the lessee charges the transport freight.
06 March 2018
No we are not going to sell the truck to them after the end of lease period .
Can we go for rent agreement . We will charge from him a lumsum rent per month and he will charge from us the transport freight simply
Can we go for rent agreement . We will charge from him a lumsum rent per month and he will charge from us the transport freight simply
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS on Purchase of Immovable Property by NRI from NRI
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- Capital gain from sale of house property
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- SFT Cash Deposit in Current Account
- When TDS on GST applied
- Before GSTAT- APL-02 Vs APL-04
- Annual return in Gst
- FORM 26A APPLICABILITY
- Value of property in capital gain
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
