The service rendered by the serivce provider is "Renta a Cab Service".
RENT- A- CAB SCHEME OPERATORS
Q.1 Who is a "Rent a cab scheme operator"?
Ans. "Rent a cab scheme operator" is a person who is engaged in the business of renting of cabs.
The new definition of rent a cab scheme operator introduced in the Finance Act, 1998 , is effective from 16th October, 1998. This definition is wider in scope than the earlier definition which only included a person who was the holder of a licence under the Rent-a-Cab-Scheme, 1989 framed by the Central Government under the Motor Vehicles Act, 1988 as a rent-a-cab-scheme operator. Under the Rent-a-Cab-Scheme, 1989 framed under the Motor Vehicles Act, 1988, a licence is granted only in case a person has a minimum of 50 cabs. This meant that a person who had less number, say 5 or 10 cabs and was engaged in the business of car rental, was not liable to pay service tax on the services of renting of cabs. Consequent upon the revised definition, such persons who are engaged in the business of renting of cabs, even if not covered under the Rent a Cab Scheme, 1989, framed under the Motor Vehicles Act, 1988, will also be required to pay service tax on the services of renting of cabs irrespective of number of cabs rented out by them.
Q.2 What is the taxable service in case of Rent- a- cab- scheme?
Ans. The taxable service rendered by a Rent a cab scheme operator means any service provided to any person, by a rent a cab scheme operator in relation to the renting of a cab.
Q.3 What is the value of service in case of Rent a cab scheme?
Ans. The value of taxable service in relation to the service provided by a Rent a cab scheme operator to any person, is the gross amount charged by such operator from such person for services in relation to the renting of a cab and includes such rental.
Any other charges billed to the customer such as processing charges, administrative fees, charges for providing extra accessories or providing other value added services such as a provision of driver etc. shall also be includible in the gross amount chargeable to Service Tax.
However, Service Tax will not be payable in cases where a bill is raised on a Rent a Cab Scheme operator, by another rent-a-cab scheme operator who has sub-let the motor cab to the latter operator provided the principal operator pays Service Tax on the amount billed to his client for renting out the motor cab so obtained by him.
This service is subject to abatement of 60%
So if you charge service tax @ 12.36% on 40% of the taxable amount you get the value as under assuming taxable value as Rs. 100
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