Service tax rate on radio taxi company
This query is : Resolved
13 August 2015
please share the service tax details related to radio taxi company
Arun Kumar Singh
(Expert)
13 August 2015
Yes, the service tax will be applicable.
Message likes :
1 times
19 August 2015
sir,
please tell the rate of service tax and who will be liable to pay chauffer or company.
please also give the refernce note.
please tell the rate of service tax and who will be liable to pay chauffer or company.
please also give the refernce note.
24 July 2025
Here’s the detailed info on **service tax for Radio Taxi services (like Ola, Uber, etc.) as of 2015**:
---
### 1. **Applicability of Service Tax**
* The service of renting out a motor vehicle with a driver (chauffeur) is taxable under **"Renting of Motor Vehicle Service"** category.
---
### 2. **Who is liable to pay Service Tax?**
* As per **Reverse Charge Mechanism (RCM)** introduced for renting motor vehicles with driver:
* The **service recipient (the company or customer)** is liable to pay service tax, not the driver.
* However, if the company (like a radio taxi company) is registered under service tax and is the service provider, it may have to collect and pay tax.
* If the driver or individual service provider is unregistered, the service recipient must pay under reverse charge.
* In practice, radio taxi companies (aggregators) are considered service providers and pay service tax on their gross charges.
---
### 3. **Service Tax Rate**
* As of 2015, the **service tax rate was 14%** (including education cess and secondary & higher education cess).
---
### 4. **Reference**
* Relevant Service Tax category: **Renting of Motor Vehicle Service** (Tariff Heading 9986).
* Finance Act & Service Tax Rules (specifically, notifications on Reverse Charge Mechanism).
* Circulars issued by CBEC regarding RCM on renting motor vehicles with driver.
---
### 5. **Summary**
| Parameter | Details |
| ----------------------- | --------------------------------------------- |
| Taxable Service | Renting of Motor Vehicle with Driver |
| Service Tax Rate (2015) | 14% (including cesses) |
| Liability to Pay Tax | Service recipient under RCM (generally) |
| Common Practice | Radio taxi company charges & pays service tax |
---
If you want, I can help draft a note with the specific law references or help you understand reverse charge in detail. Would you like that?
---
### 1. **Applicability of Service Tax**
* The service of renting out a motor vehicle with a driver (chauffeur) is taxable under **"Renting of Motor Vehicle Service"** category.
---
### 2. **Who is liable to pay Service Tax?**
* As per **Reverse Charge Mechanism (RCM)** introduced for renting motor vehicles with driver:
* The **service recipient (the company or customer)** is liable to pay service tax, not the driver.
* However, if the company (like a radio taxi company) is registered under service tax and is the service provider, it may have to collect and pay tax.
* If the driver or individual service provider is unregistered, the service recipient must pay under reverse charge.
* In practice, radio taxi companies (aggregators) are considered service providers and pay service tax on their gross charges.
---
### 3. **Service Tax Rate**
* As of 2015, the **service tax rate was 14%** (including education cess and secondary & higher education cess).
---
### 4. **Reference**
* Relevant Service Tax category: **Renting of Motor Vehicle Service** (Tariff Heading 9986).
* Finance Act & Service Tax Rules (specifically, notifications on Reverse Charge Mechanism).
* Circulars issued by CBEC regarding RCM on renting motor vehicles with driver.
---
### 5. **Summary**
| Parameter | Details |
| ----------------------- | --------------------------------------------- |
| Taxable Service | Renting of Motor Vehicle with Driver |
| Service Tax Rate (2015) | 14% (including cesses) |
| Liability to Pay Tax | Service recipient under RCM (generally) |
| Common Practice | Radio taxi company charges & pays service tax |
---
If you want, I can help draft a note with the specific law references or help you understand reverse charge in detail. Would you like that?
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