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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 June 2013 we hire a taxi for 2 years on contract basis on 20000/-pm and HSD will be filled by contractor himself and we will reimburse him hsd charges...
Now query is whether we should deduct service tax on whole amount including hsd filled reimbursed under RCM or only on hire chgs...

Rupesh Jain

Rupesh Jain (Expert)

19 June 2013 Taxi provider is pvt. or ltd company then no liabile of service tax on you.

but if provider is other than company and your are pvt ltd / ltd company and provider having no service tax number
then you have to pay under reverse charge system @ 12.36% of billing amount .

if provider and reciver both non company then no servcie tax liability on you.

why are you doing HSD matter .
it will include in billing.

Ganeshbabu K

Ganeshbabu K (Expert)

19 June 2013 1)in my opinion service receiver can reimburse amount for HSD as reimbursement to service provider with assuming him as pure agent.

2)service provider and service receiver are free to decide their scope of service...and can mention HSD paid as re-imbursement as a pure agent..

3)however we may expect some different view from service tax department

My opinion:
1)discharge RCM after reducing HSD re-reimbursement paid.

2)if department objects later will see it later and can try to convince that here service provider acts as a pure agent for HSD purchase.(which may not be possible as far as my knowledge).

Thanks & regards
Ganesh babu k

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