Partial reverse charge mechanism

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2012 Dear experts,

A corporation has hired bus services & cars for three purposes:

1. to carry employees from the residential colony to work place and vice-versa

2. to carry employees children from residential colony to school and vice-versa

3. to carry employees from colony to railway station and vice-versa

Under above stated circumstances what will be service tax payable by the corporation in each case if

A) SP is an individual registered under ST

B) SP is an indiviual and not registered under ST

What is the liability of SR ? SR is liable to pay ST at what rate and on what amount with regard to notification no.30/2012 dated 20/6/2012 ?

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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12 September 2012 If service provider does not charge service tax in invoice and he is not registered under service tax i.e. ST No. not quoted in invoice, it can be assumed that it is not availing input credit. Covered: Hiring passenger cars, cabs, buses etc. Excluded: Radio taxi, metered cab, three wheeler, auto rickshaw, stage carrier, contract carriage and packaged tour, public transport not predominantly for tourism purpose e.g. Meru cabs, bus having contract permit hired for transportation of employees.

On Abated Value - 100% 12.36
on Non Abated Value - 40% is Your Liablity

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 September 2012 1. All the above services are covered under reverse charge.

2. The status of the service provider is a sole proprietor. Accordingly reverse charge is applicable.
The fact that the service provider is not registered makes no difference.

3. Abatement of 60% is available.

4. Service tax to be paid = Hire charges*40%*12.36%

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