Reverse charge mechanism-rent a cab
This query is : Resolved
VIPIN KUMJAR
(Querist)
29 November 2012
As per the details of Reverse Charge mechanism, When the service provider avails benefit of abatement provided under notification 26/2012 - ST (Supra) i.e. calculate tax @ 4.944% (12.36 * 40%) then 100% liability of payment of service tax lies on the service Provider.
In case of my client who is a service receiver from a Rent a cab operator, the service provider avails benefit of abatement and and raised a bill for rs. 1000/-. Now, tell me how much amount is payable towards service tax by my my client.
1. 1000*12.36%= 123.60 OR
2. 400* 12.36%= 49.44
In case of my client who is a service receiver from a Rent a cab operator, the service provider avails benefit of abatement and and raised a bill for rs. 1000/-. Now, tell me how much amount is payable towards service tax by my my client.
1. 1000*12.36%= 123.60 OR
2. 400* 12.36%= 49.44
29 November 2012
Your client( Service receiver) liable to pay only on 40% i,e 49.44 if cab operator avails the abatement.
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