St on transportation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2013 One of our transportation vendor (unregister vendor) has given invoice excluding ST of Rs.10000/- (Passenger Bus hire charges ) , what is our ST liability .
do we need to pay full 12.36% to department or share of the ST under RCM.
If we should pay under which head ? kindly suggest me .

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2013 One of our transportation vendor (unregister vendor) has given invoice excluding ST of Rs.10000/- (Passenger Bus hire charges ) , what is our ST liability . do we need to pay full 12.36% to department or share of the ST under RCM. If we should pay under which head ? kindly suggest me .

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
Follow

25 July 2025 This is a classic case under the **Service Tax Reverse Charge Mechanism (RCM)** in effect **as of 25 September 2013**, related to **passenger transport services** (e.g. hiring of buses).

Let’s break this down to give you a **clear, compliant answer**:

---

## ✅ Situation Summary:

* You **hired a passenger bus** from a **vendor who is unregistered under Service Tax**
* Invoice amount: ₹10,000 (excluding ST)
* **No Service Tax charged** by vendor
* You are asking:

* Is **Service Tax applicable?**
* If yes, do **you pay 100% or partial under RCM?**
* Under **which accounting/service code** to pay?

---

## 📘 Step 1: Is Service Tax applicable?

Depends on **type of passenger transport**:

| Scenario | Service Tax Status (2013) |
| ------------------------------------------------------------------------ | ---------------------------------------------- |
| **Contract carriage** (e.g. bus rented with driver for specific trip) | ✅ **Taxable** |
| **Stage carriage** (public bus transport with tickets issued per person) | ❌ **Exempt** |
| **Employee transportation (staff bus)** by employer | ✅ **Taxable** under "Renting of Motor Vehicle" |

From your message, it sounds like it's a **contracted bus hire** — so it **is taxable**.

---

## 📘 Step 2: Who pays Service Tax?

As per **Notification No. 30/2012-ST** (as amended), for the service of **renting of motor vehicle (designed to carry passengers)**:

| Type of Service Provider | Reverse Charge Split |
| ---------------------------------------------------- | ----------------------------------------------------------- |
| **Individual / HUF / Proprietor / Partnership firm** | 60% by **receiver**, 40% by **provider** |
| If **provider is unregistered** (as in your case) | Provider cannot pay — **you (receiver) pay 100% under RCM** |

---

## ✅ Final Answer:

> Yes, you must pay **100% Service Tax** on ₹10,000 under **Reverse Charge**, since:
>
> * Service is taxable (bus hire for passenger transport)
> * Vendor is **unregistered**
> * You are the **liable service recipient** under RCM

### 🧮 Tax Calculation:

| Base Value | ₹10,000 |
| --------------------------- | ---------------- |
| Service Tax @12.36% | ₹1,236 |
| **Payable by you to Govt.** | ₹1,236 under RCM |

---

## 📤 Accounting & Payment Head:

* **Service Tax Code / Category**: **"Renting of Motor Vehicle designed to carry passengers"**
* **Accounting Code for ST** (2013):

| Description | Code |
| -------------- | -------- |
| Tax | 00441089 |
| Education Cess | 00440298 |
| SHE Cess | 00440426 |

Use these when paying via **GAR-7 / online payment portal**.

---

## ✅ CENVAT Credit:

* You **can take credit** of this ₹1,236 paid under RCM **only if**:

* You use the vehicle **for providing output taxable services** (e.g. travel, staff movement in taxable business)
* And **not for personal use or exempt activities**

---

## 📝 Summary:

| Question | Answer |
| --------------------- | ------------------------------------------------------- |
| Is ST payable? | ✅ Yes |
| Who pays it? | ✅ You (100%) under RCM |
| Rate? | ✅ 12.36% on ₹10,000 = ₹1,236 |
| Under which category? | "Renting of motor vehicle designed to carry passengers" |
| Can you take credit? | ✅ Yes, if used for taxable business services |

---

Let me know if you'd like a sample **RCM entry in books** or **payment challan format**.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

RAJ SANKLECHA

Pushkar Nagda

sachingurav

R.Prashanth

SUBASH CHANDRA BOSE

Subscribe Now

St on transportation

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA