Rent a cab scheme w.e.f. 01.10.2014

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2014

W.E.F. 01.10.2014 wide notofication no. 10/2014 liability of service tax payable changed form 60%/40% to 50%/50%.

Now my question is whether if any service provider (proprietor)charging service tax on abated value i.e. 40% (4.94%) what is the service tax liability of service receiver (pvt ltd Company).

& if Service provider is not charging service then what is liability of service receiver?

HIREN

HIREN (Expert)

17 December 2014 Pls refer Point (1) & (2a) (2b)

(1) For Taxies or vehicles having capacity of carrying more than 06 passengers + Driver (which will include bus services also) : This category is now not eligible for abatement and hence Service Tax will be charged @ 12.36 % of 100% bill amount. Further, the service tax will have to be paid by both – service provider & service recipient in 50% - 50% proportion i.e. each of them will pay service tax @ 6.18 % of 100% bill amount. Here, the service provider will claim service tax @ 6.18% in the bill as he has to pay the same.

(2) For Taxies or vehicles having capacity of carrying up to 06 passengers + Driver : There are following two alternatives for this category.

(2a)When the service provider claims abatement :
As per the existing practice, Service tax will be calculated @ 4.94% of 100 % bill amount and it will be payable by the service recipient. Here, the service provider will not claim service tax in the bill as he has not paid the same.

(2b)When the service provider does not claim abatement :
In this case, scenario will be similar to sr. no. (1) above.

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