LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Rent a cab

nitin (M.Com) (100 Points)

28 November 2014

Dear All,

Service tax (RCM) rent a cab

My company is service receiver & Rent a cab is Service provider, Service provider is also Company. Service provider pays 60% service tax under abetment to government & my company pays 40% service tax to service provider.

My question is can we (service receiver) also pays 60% service tax to government or not?

Reply
Follow
Share

6 Replies

CA AnKiT BoHrA (AB) (Manager) (25955 Points)
Replied 28 November 2014

it is a type of question that ur income tax liability is 1000 rs can u pay 2000

sorry dear but i didnt understand why u wanna pay much...???

Gagan Deep Singh (CHARTERED ACCOUNTANT) (1190 Points)
Replied 29 November 2014

Reverse charge will be applicable in this case only when service provider is Individual, HUF, Proprietary Firm, Partnership Firm.

Since service provider is company here therefore no RCM will be applicable here.

nitin (M.Com) (100 Points)
Replied 29 November 2014

Dear All,

But service provider is charging 40% service tax to service receiver. & service provider paying 60% service tax to gov. Service provider is saying it is abatment.

Gagan Deep Singh (CHARTERED ACCOUNTANT) (1190 Points)
Replied 29 November 2014

But its not your problem. Your company is service reciever & you will avail credit only for that amount what is indicated in the invoice & you have paid. I dont know why are u concerned about SP if he is paying extra tax from his own pocket.

nitin (M.Com) (100 Points)
Replied 29 November 2014

Thanks sir

1 Like

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 30 November 2014

Agree with Mr. Gagan. When the service provider is a company, then reverse charge is not applicable and any liabilty (if taking abatement of 60%, ST liabiltiy 4.944%, if not taking abatement, ST liability 12.36%) to pay servie tax is upon service provider u/s 68(1).

As service receiver, you ensure that he doesn't charge other then 4.944% or 12.36% and pay him accordingly. You are not eligible to take cenvat credit.

1 Like