Reverse charge mechanism

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apurva (Querist)
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05 August 2013 Dear sir
If (i)the director of a pvt co.uses the cab service for some official purpose (ii)hired a cab for providing support service to banks..
Can these two situations attract reverse charge mechanism.

Thanks

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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05 August 2013 Yes reverse charge is applicable to company in the given cases when payment is made by the company.

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Ganeshbabu K

Ganeshbabu K (Expert)
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05 August 2013 if the bill is in the name of director reversecharge not applicable

if the bill is in the name of company reversecharge applicable

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apurva

apurva (Querist)
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07 August 2013 sir..bt as per notification it is stated that RCM is applicable if cab is hired for carrying passengers..
kindly reply

Ganeshbabu K

Ganeshbabu K (Expert)
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07 August 2013 Yes,,in your case if bill is in the name of director, here service receiver is individual and consequently RCM not applicable

if bill is in the name of company RCM applicable

yes,,it may be your directors, or employees who ever uses services of rent a cab they are passengers to cab service provider

Ganeshbabu K

Ganeshbabu K (Expert)
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07 August 2013 As i said to you..

You can avoid RCM on rent a cab by getting bills in the name of employees or in the name of directors...and and make it as -reimbursement to employees,,

as here service receiver is individual reversecharge not applicable

apurva

apurva (Querist)
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07 August 2013 sir first case is clear but in 2nd case co. is providing supporting service to banks i.e cash transfer etc. for this purpose co hired a cab.
so in this case there is no passenger...i want to knw the meaning of passenger in this context.
thank you

Ganeshbabu K

Ganeshbabu K (Expert)
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07 August 2013 passenger means..cab used for transportation of persons

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