Renting or hire of motor vehicle designed to carry passenger

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This query is : Resolved

Prudvi Raj Saya (Querist)

27 April 2013 The service "Renting or hire of Motor vehicle designed to carry passengers" is covered under the reverse charge mechanism.

But this service is not covered specifically u/s 65(105) of Finance Act, 1994 i.e the 119 accounting codes.
Please refer to the list here.
(https://www.servicetax.gov.in/circular/st-circular12/st-circ-165-2012-annx.pdf)

Should the last service i.e "other services not covered by 119 above" used to pay the tax for this service?

Please confirm or let me know the accounting code for assigned to this service.

Thanks.

CA Nayan Ratandhayara

CA Nayan Ratandhayara (Expert)

27 April 2013 It will be under Rent-a-cab scheme operator services with codes 00440048 00440049 00441307 00440050.

Prudvi Raj Saya

Prudvi Raj Saya (Querist)

27 April 2013 But cab operator service is different from carrying of passengers service on an agreement right?

beacuse of this, we have been paying it under other than negative list

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

21 July 2025 Key points:
Service Description:

Renting or hiring of motor vehicles designed to carry passengers (like taxis, cabs, buses).

Reverse Charge Mechanism (RCM):

Under service tax law (Finance Act 1994), this service was covered under RCM, meaning the recipient of the service (usually a business) pays the service tax instead of the supplier.

Accounting Codes Issue:

Section 65(105) of the Finance Act 1994 provides definitions for various services.

However, your point is that this specific service is not explicitly listed in the 119 accounting codes issued for service tax.

Circular Reference:

The circular you referred to (Circular 165/2012) provides detailed accounting codes for services.

Since "Renting or hire of motor vehicle designed to carry passengers" is not explicitly listed, the confusion arises about which accounting code to use.

Resolution:
The service can be classified under "Rent-a-Cab Scheme Operator Services" with codes such as:

__________

However, note:

Rent-a-Cab service operators provide a different service (taxi service with driver).

Renting/hiring vehicles without driver (like self-drive rental) is treated separately.

For renting or hiring motor vehicles without driver (designed to carry passengers), when under RCM, the tax should be paid under the code "other services not covered by 119 above" if no specific code exists.

What you should do:
If no exact accounting code exists for your service, you can classify the service under "Other Services" category for payment under reverse charge.

Keep proper documentation explaining the nature of service.

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