Abatement for Rent a Cab Service

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SANJAY THAKOR

MANAGER-FINANCE

66 Points Posted on 01 February 2011

If a service provider providing Rent a Cab service for which abatement is available at 60% of gross value of taxable value vide notification 1/2006.

Can he do the multiple transactions i.e. billing Service Tax at 4.12% where his customers are asking to charge service tax at abated rate.

And can he charge Service Tax at full rate i.e. @ 10.30% where his customers are not asking to bill at abated rate of service tax. Pls advice.

Replies (3)

U S Sharma

glidor@gmail.com

21670 Points Posted on 02 February 2011

he can not charge two rates,

SANJAY THAKOR

MANAGER-FINANCE

66 Points Posted on 04 February 2011


	Thanks Mr. Sharma for your valuable reply. However in notification no 1/2006 it is mentioned that the abatement option will not be available in case if service provider avails the benefit of CENVAT credit. But it is not mentioned that the service provider can not provide the services at two rates. Pls let us know the circular / notification under which it is mentioned the service provider can not provide two rate of services.

U S Sharma

glidor@gmail.com

21670 Points Posted on 05 February 2011

utilization of abatement means u have utilized the facility to pay at reduced rates, and it can be exercised once in financial year, once the person pays at full rate of tax- he can not avail exemption for rest of the year, as the status of the person is "tax payer at full rate" for the financial year.

choice is in hands of tax payer to avail the exemption or not upto the 1st incident of invoice for the year.