Rcm service tax - rent a cab

This query is : Resolved

nilesh (Querist)
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25 October 2013 Dear Expert,

if company is taken a car on Kilometer basis then RCM would applicable on such expenses.
we are not taking the car on rent basis

provide the actual defination also

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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25 October 2013 Irrespective of whether the payment for a motor vehicle is made on hourly/daily basis or on kilometer basis, under Finance Act 1994 what is to be seen is whether a service falls under the definition of that category.

The category Rent-a-Cab is not taking a motor car only on rent. The actual Rent -a-Cab service is provided "in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not engaged in the similar line of business".

Therefore not only cars but also mini-vans and buses used to carry passengers will be covered under Rent-a-Cab Services.

The payment made to the cab operator would be subject to service tax under the RCM.

Ganeshbabu K

Ganeshbabu K (Expert)
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25 October 2013 Indeed you are liable to pay service tax on 40% of value
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if service provider is individual,HUF,partnership and service receiver is business entity registered as body corporate
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the service provider need not pay - he should mention in his invoice that he has not availed any Cenvat credit and that the service tax is payable by service receiver under Notification No. 30/2012-ST dated 20-6-2012

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