Hiring of motor vehicles under reverese charge

Queries 26144 views 8 replies

Dear Experts,

As per service tax notification no. 30/2012 dt. 20/06/2012 Hiring of motor vehicles to carry passenger on abated value and non abated value under reverse charge machenism.

What is the meaning of abated value and non abated value for calculation of service tax. Secondly we have hiring bus for our workers on some collection of Employees contribution and some payment made by company. In this case, is company is liable for service tax under reverse charge.

Thanks 

 

Replies (8)

1) Abatement means payment of service tax at low rate opted by the service provider.

2) If the company is paying the hire charges by collecting  portion of the amount from employees, then the company is only liable for payment of service tax under reverse charge mechanism.

   

For Renta CAB Operator service under Reverse Charge Mechanism having 2 options;

they are 

1) without abatement , Service Provider has to pay ST on 60% value of services and Recepient has to pay ST for the rest of 40% value. 

2) with abatement of 60% Service Receiver has to pay ST on 40% value.

 Only in cases where the Service Provider is an individual, HUFpartnership firm, AOP or Trust.

for the above service NO CENVAT CREDIT IS AVAILABLE.

I am little bit confuse about the following term in which 100% liability of service tax receiver.

(a)   in respect of  services  provided or agreed to be provided  by way of renting of a  motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business(service provider liability nil and receiver 100%)

(b)   in respect of  services  provided or agreed to be provided  by way of renting of a  motor vehicle designed to carry passengers on non abated value to any person who is not engaged in the similar line of business(service provider 60% and receiver 40%)

How can we segregate above two paragraph. Pl advice.

Thanks

 

Dear Ram Kr

If I say in layman language then, if your service provider has not charged Service Tax in the bill and you are Business Entity then, you have to deposit ST on XXX * 40% * 12.36%. 60% abetment available on Renting of motor vehicles designed to carry passengers  as per ST notifi no 26/2012.

Dear Sir Can we charge TDS on payemt of Vehicle hire charges daily basis. Please give your valuable advice.

Dear Manoj

TDS is not a charge it's a deduction, and yes I think TDS will be deductible subject to exemption limit available u/s 194C of IT Act.

DEAR ALL, HIRING OF MOTOR VEHICLE(BUS) BY AN NGO SHOULD BE COVERED UNDER THE REVERSE CHARGE'S SCOPE OR NOT? NOTE: SERVICE PROVIDER IS NOT CHARGING SERVICE TAX IN THE GIVEN BILL. THANKS IN ADAVANCE :)

Sir, i am working in PSPCL. we hiring a moto cab for inspection of works and attending the meetings of our higher officers. The service provder is an individual having only one cab which we hire on the monthly rent of Rs.27500/- and he is not registered with ST authorities and not claiming ST tax in his invoice. What is the liability of Service Tax and who will pay the same. our office is registered with ST authorties-Pritam Singh Hanspal


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