Service tax on immovable property related

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yashsr

1219 Points Posted on 06 November 2014

A Public Limited Company wants to give on lease some Machinery along with Factory Building to its Sister Concer. What will be the implication under Service Tax in the following 3 scenarios:

1. The agreement for renting of Factory building and plant & Machinery is made in a single agreement.

2. The agreement for leasing of Building and plant Machinery is made separately.

3. The agreement for leasing is only entered for Building but in reality Plant and Machinery is also given on lease

Note: A separate debit note for Electricity and other ancillary costs will also be raised apart from the agreement monthly value.

Replies (3)

DEEPAK

STUDY

74 Points Posted on 06 November 2014

A. If lease amounts to deemed sale, then reverse cenvat credit availed on plant and machinery. B. If lease does not amount to sale, then.:- 1. ST @ 12.36% on lease amount exceeding Rs. 10 Lacs in first year and on entire amount in subsequent years. 2. Same as above but here tax is payable under "RIP" on building and under "SOTG" on plant and machinery. 3.same as 1 above. Electricity and ancillary cost are not includible in taxable value if recovered on actual basis.