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Rent a cab - reverse charge

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Querist : Anonymous

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Querist : Anonymous (Querist)
13 September 2013 Hi,

We are take services from few cab providers who are not regular vendors to us. As and when there is requirement we hire the cab, do we still need to pay service tax under reverse charge mechanism. Also these cab owners has no service tax registration and they charge on km basis.

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Vijay Thadani

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Vijay Thadani (Expert)
14 September 2013 Reverse Tax has been brought by revenue authority to increase the tax net, that is those persons who have been exemplified in your query. The liability of Service receiver in such cases is to deposit the amount of reverse tax applicable.

Further in such cases the cab providers may be small service providers who are exempted. But this becomes difficult to ensure from the view point of service receiver, who is need of documentary evidence for not depositing applicable service tax under reverse charge.
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