Service Tax on Rent-a-Cab
This query is : Resolved
26 June 2010
Dear Expert
Our company has hired vehicles from various CAB Operators. One of the CAB operator is claiming service tax on 100% bill amout rather than 40% i.e. claiming 10.30% service tax on 100% bill amount rather than 40% bill amount. I have asked him about this and he is replying that we are awailing 100% CANVAT Credit hence we are claiming service tax on 100% bill amount. So I request you to please explain me. If any service provider availaing 100% CANVAT Credit of Service tax then he can not get the benifit of ABETMENT? Please explain. I will be very thankful to you.
Our company has hired vehicles from various CAB Operators. One of the CAB operator is claiming service tax on 100% bill amout rather than 40% i.e. claiming 10.30% service tax on 100% bill amount rather than 40% bill amount. I have asked him about this and he is replying that we are awailing 100% CANVAT Credit hence we are claiming service tax on 100% bill amount. So I request you to please explain me. If any service provider availaing 100% CANVAT Credit of Service tax then he can not get the benifit of ABETMENT? Please explain. I will be very thankful to you.
26 June 2010
In my view the cab operator is correct. This is the general industry practice.
CMA Ramesh Krishnan
(Expert)
26 June 2010
Yes. Cab operator is correct. becasue if service provider opted for abatement he cannot claim CENVAT , if he not opted for abatement he can charge full ST and claim CENVAT also
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