Regarding lease rental service tax issue

Hi to all

A comapny purchase car on installment basis from Bank .Then it let out the same to another car operator in consideration of receiving of Lease Rent on monthly basis from the lessee for three years.After Three years Car will be handed over to Co. the ownership will lie to co. but right to use & effective control will be with the lessee for 3 years.

Whether the business above mentioned is liable to Service TAx & if yes ,then @ what rate & service.

Replies (1)
Yes , above transaction is liable to ST. @ 12.36% on 10 % of total finance charge (intt) (ie after abatement of 90 %)

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