Travel operators

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vijay (Querist)

08 November 2013 sir,

we have a private limited co. engaged in travel business - we have 2 tempo travellers which picksup and drops travellers to pilgrimage spots. we do not provide food n accomodation. we only pick up and drop travellers who book seats with us.

please what is the percentage of service tax applicable when the turnover exceeds 10 lacs.

please resolve

regards

vijay

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

08 November 2013 The services rendered by your company are covered under the definition of Rent-a-Cab services. Persons providing Rent-a-Cab Service (the service provider being a body corporate) can either avail of an abatement of 60% and pay service tax on the balance 40% @ 12.36% or can pay the service tax on the entire bill. The option once exercised cannot be changed during that particular financial year.

However with effect from 01.04.2011, service tax paid on Rent-a-Cab Services do not qualify as Input Services and hence the service recipients would be loath to pay service tax at the higher rate of 12.36% against 4.944% if the abatement is availed.

You may consider the above and opt for either scheme of service tax charging on y0ur Rent-a-Cab Service

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