Rate of tax on car hire-abatement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 May 2012 A pvt limited company engaged in manpower supply. They also provide car hire to firms, compary or individual for local or out of state travelling.Can they take abatement 60% on car hire charges and charge service tax @40% on gross value.please guide about that.

Arun Gulati

Arun Gulati (Expert)
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23 May 2012 under 'Renting of a cab' service tax is leviable on 40% value. read Notification No. 1/2006-ST, dated 31.3.2006.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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20 July 2025 Yes, the private limited company can avail 60% abatement on car hire charges and charge service tax on 40%, provided it does not claim any CENVAT credit on inputs or services used in providing car hire.

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