Reverse charge on rent or hiring of motor vechiles
This query is : Resolved
Ganeshbabu K
(Expert)
10 July 2013
Reverse charge in renting or hire of Motor vehicle designed to carry passengers:-
1)Reverse charge when renting to a person who is not in similar line of business.
2)Service Provider should be HUF, Individual, firm
3)Service receiver – Business entity registered as body corporate
4)Tax on 40%, if Cenvat credit is not availed by the service provider.
5)If motor vehicle is taken on hire (operating lease) without driver, it is ‘transfer of right to goods’. Then it is deemed sale of goods and Vat will apply – not service tax.
Thanks & regards
Ganesh babu k
1)Reverse charge when renting to a person who is not in similar line of business.
2)Service Provider should be HUF, Individual, firm
3)Service receiver – Business entity registered as body corporate
4)Tax on 40%, if Cenvat credit is not availed by the service provider.
5)If motor vehicle is taken on hire (operating lease) without driver, it is ‘transfer of right to goods’. Then it is deemed sale of goods and Vat will apply – not service tax.
Thanks & regards
Ganesh babu k
10 July 2013
CORRECTLY EXPLAINED.
Ganeshbabu K
(Expert)
11 July 2013
1)Tax on 40% of value by service receiver and Nil by service provider.
2)If the service provider intends to avail Cenvat credit, he can pay service tax on balance 60%.
3)Thus, service receiver is liable to pay service tax only on 40% value.
Thanks & regards
Ganesh babu k
2)If the service provider intends to avail Cenvat credit, he can pay service tax on balance 60%.
3)Thus, service receiver is liable to pay service tax only on 40% value.
Thanks & regards
Ganesh babu k
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