25 October 2008
Suggestion is required on the following matter:-
Facts: There are 4 person, the status of the these four is as follows:- 1. A Ltd Co., 2. Mr.X, an individual 3. Mr.Y, an individual 4. B Pvt. Ltd. Co. Each four are having one mine at Udaipur. Beacause as per udaipur royalty rules a person can not have more than one mine, so A ltd decide to hold the mine in the name of the other person as mentioned above. each of four will be liable to file royalty return individually. Mr X & Mr Y, Both are the promoter & Director in A Ltd. & B. Pvt. Ltd. B Pvt Ltd is to be merged w.e.f. 01.04.08 in A Ltd. & matter is pending with the honr. high court.
Now the query is-----
If there is a MOU between these four person i.e MR.X, Mr.Y,A Ltd. & B Pvt. ltd. that All assets to be used in mining process will be hled by A Ltd & all revenue generated through mining business will be of A Ltd. Mr. X, Mr .Y & B.Pvt. Ltd will get Rs 5000/- p.m from A Ltd. against use of their name/right in mining.
What will be the sales tax, service tax, & royalty provision in this regard.
31 October 2008
The agreement with A is for permitting him to use their mine. The consideration for usage of their mine A pays a lease rent of Rs 5000 each. Am I right?
If so, lease tax and service tax would be applicable in my opinion.
CAclubindia
