Rent a cab service

This query is : Resolved

Vivek Agarwal (Querist)
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07 November 2012 W Pvt Ltd. (Delhi) based travel agency, now he enters into a contract with me (Firm). According to the terms & Conditions i will arrange driver and car in kolkata for his company. customers will directly contact to W Pvt Ltd. for booking purpose. W Pvt. Ltd. will raise the entire bill including service tax on his customer and the customer will issue cheque in the name of W pvt. ltd.

In doing all this work the above company will give me certain amount of profit on base fare and drivers shares after deduction the TDS on entire 90/-.

suppose entire bill amount was Rs. 100.
W Pvt Ltd. kept his 10/-
And issued me ch. of 89.1/- ( after deducting TDS on my share + drivers shares)
In this 89.1/- my share is 15% of base shares (before TDS)

At time of making payment of MY SHARE of 15% of base fare, W Pvt. Ltd. deduct service tax and after deducting ST on balalnce amount of 15% shrare it deduct TDS and after that issue me cheque.

I want to know whether there is any service tax liability on me? if yes than on what amount?

on the above contract TDS will be charged U/s 194C or 194H?

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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09 November 2012 The IT query and ST query should ideally be sent separately.
AS far as ST is concerned as you are in this case working as an agent for marketing the services of Kolkatta cab service, you are liable to pay ST on 15% unless you are exempted under the Small service provider.

Vivek Agarwal

Vivek Agarwal (Querist)
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09 November 2012 sir, in this entire 89.1/- cheque is on my firm name, from there i will make payment to drivers of there shares. I am just raising the bill on 15%.

Is still the above answer will be same???

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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21 July 2025 Thanks for sharing the details! Let me clarify your situation regarding the Service Tax (ST) and Income Tax (IT) queries based on what you wrote:

You are acting as an agent marketing Kolkata cab services.

You receive a cheque (₹89.1) in your firm’s name.

You will pay the drivers from this amount.

You are raising a bill on 15% service tax.

Key points:
Service Tax (ST) on 15%:
Since you are acting as an agent for cab services, you are liable to pay Service Tax on the commission/agency fee you earn (generally 15% of the value of service). The service tax is applicable on the commission part, not on the entire amount paid to the drivers.

Cheque in Firm Name:
Receiving the cheque in your firm’s name does not change your tax liability. You collect the amount on behalf of the cab service but have to pay the drivers their share accordingly.

Is your answer the same?

If you are charging Service Tax on your commission (15%), then yes, the answer remains the same.

You must remit Service Tax on your commission portion, not on the total ₹89.1 received.

Small Service Provider Exemption:

If your turnover/service receipts are below the threshold limit (which was ₹10 lakhs during that period), you could claim exemption from Service Tax under the Small Service Provider scheme.

If you are exempted, then no Service Tax is payable.

Summary for your case:
You receive ₹89.1 on your firm name.

You pay drivers their share.

You raise a bill and pay Service Tax on your commission (15%).

Your tax obligation depends on whether you qualify for exemption as a small service provider.

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