Renting of cab

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This query is : Resolved

Somanath Hiremath (Querist)

02 August 2014 Dear Sir,

Whether service provider is liable to pay service tax on 60%of taxable value in case of renting of vehicle.( Provider is not claiming Cenvat credit.

Example

Mr X is a Service provider whose give vehicle to a Company on rent basis for rs 10,000. The company is paying Service tax on 40% of bill amount( i.e on Rs 4,000) to govt under reverse Charge Mechanism. Whether Mr x is Liable to Pay St on Remaining 60% (i.e on 6,000) of bill amount.

Ganeshbabu K

Ganeshbabu K (Expert)

03 August 2014 If Provider is not claiming inputs
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Abatement can be taken @60%
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So only 40% is taxable
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So if RCM Applicable-Service receiver responsible to discharge this liability directly to govt.
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If RCM Not applicable-Service provider have to charge 40% of service tax in his invoice and collect from customer and pay to govt.

Somanath Hiremath

Somanath Hiremath (Querist)

07 August 2014 department persons are asking us to pay service tax on remaining 60% bill amt.We are not claiming cenvat credit

Ganeshbabu K

Ganeshbabu K (Expert)

07 August 2014 If you are service receiver then maximum liability on rent a cab service will not exceed 40% of service tax
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If service provider intends to take cenvat credit on his inputs he has to pay balance 60% tax
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Refer reversecharge notification

Ask them reason for it,,

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