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Doubt on service tax???

Service Tax (Legacy) 786 views 4 replies

Dear all,

Please clarify me on following?

A company having a main business of trading goods which is normally sales and purchases the goods, gives its Vehicles on hire to other persons and charge Service Tax on 40% taxable value and deposited it accordingly. Now company is also taking vehicle on hire from individuals for its employees on monthly basis.

Whether Reverse charge is applicable to the company as it is Service Receiver also?

Is it possible that company can pay service tax as a service receiver as well as service provider in same service?

Can it adjust the service tax payment from receiving services with the payment of providing services? or it has to pay service tax as both Service Provider and Service Receiver?

Please reply soon!!!

Thanks in advance 

Sanjay Verma

 

Replies (4)

I am not an expert on the subject, but I think it is possible to pay the Sevice Tax as Service Receiver as well as Service Provider.

 

Notification 30/2012-ST dated 20.06.2012 followed with corrigendum of 29.06.2012 might help you

But as per Reverse Charge Mechanism, Reverse Charge does not apply if Service provider and service Receiver are in similar lines. And in such case service provider and the company are in similar line.

it  is assumed that your company is providing vehicles for goods carriage and hence it covered under GTA. and under GTA if the recepient is specified person then your company need not collect the service tax and pay only the service recepient will pay under reverse charge mechanism.

Your second question is about your company is also taking vehicle on hire as such your company need to pay service tax under reverse charge mechanism

 

After 01.07.2012, you need not pay service tax for the vehicles you gave on hire provided you dont avail cenvat credit.  As per the notification number 30/2012, service receiver has to pay service tax on this service on 40%.  You need to give one declaration to the service recipients that you dont avail cenvat credit.

 

As far as you are receiving the cab service (for your employees), you need to pay tax on 40% as service recipient.  You need to get one declaration from the service provider that he has not availed the cenvat credit.

 

Hope this is clear.


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