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Service tax on lease rent

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Querist : Anonymous

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Querist : Anonymous (Querist)
04 November 2011 We have taken Factory on Lease Rent. It includes Land, building and machineries. Ownership remains with lessor only right to use have been given to lessee. No other services are provided by lessor nor operators etc are given.

Whether it attracts service tax? if yes on whole amount or on lnd & building part only.

wat will be rate? can we claim for refund as our final output is nethir taxble under service tax nor under vat or excise?
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PUNEET GOYAL

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PUNEET GOYAL (Expert)
05 November 2011 1. As far as Lease of Land and Building is concerned it is taxable service under the head RENTING OF IMMOVEABLE PROPERTY.

2. As far as lease of machineries are concerned, 4 conditions given for financial lease service under explanation to section 65 (12)are to be checked for taxing it under BANKING AND OTHER FINANCIAL SERVICES. And as per the above fact it seems that it will not be taxed under the heading SUPPLY OF TANGIBLE GOODS FOR USE as there is a transfer of possession of machinery to the lessee.
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