My company proposes to hire the servies of cabs for our operations at installations under "rent a cab" category through tender. The bidder who is participating in the tender preferes not to extend the benefit of abatement on of 60% (in case he avails the cenvat credit on input service). Under such situation, whether the applicable service tax of 10.3% will come down to the extent he availed the cenvat credit for input services or not? or under such situation, the rate of service tax of 10.3% will be same or less than that ?
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Abatement on rent a cab service
Replies (1)
the bidder has quoted service tax @ 10.3% the4 possible reasos are as under
1) the bidder is an agent and would hire cabs to perform the services of tender, he will enjoyu the input credit of cab owners( 40% taxable ) and would bill you again for 100%
2) the bidder is unknown about the abatement of 60%
3) under the bid clause there is no mention of service tax quantam by company,
4) the bid opening personals/ team may ask the bidder to i) either revise the bid for service tax of 40% of taxable service as per notification 1/2006-st or ii) pass on the cenvat credit availed on input services to the company .........it all depends on the procedure and terms of the company.
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