Rcm service tax - rent a cab

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This query is : Resolved

nilesh (Querist)

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)

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)

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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