Dear Members,
As per the new regime of service tax, in case of letting out of motor vehicles on hire by an individual or a firm to a company, reverse charge mechanism would be applicable.
In this regard, if an employee of a company hires a cab, and later on seeks the reimbursement from the company, is the company liable to pay tax under reverse charge mechanism, or this transaction would be treated as a separate transaction between employee and employer and thereby not subject to service tax?
Two scenarios may be possible:
- Bill obtained by the employee in his own name
- Bill obtained in the name of the company
I'm more concerned about the second scenario. Pls share your views in this regard. Hope you got my question.
CAclubindia
