Service tax in case tour operator and renting of passenger

162 views 2 replies

kapil dev choudhary

42 Points Joined September 2013

Fact - The Service Provider is an proprietorship concern registered with service tax department for providing tour operator services on which 70% abatement is available to the service provider thus only 30% of 15% i.e 4.5% Service tax is payable on the value of services provided. Issue- In the case of above mentioned service provider , the service receiver is an private limited company which is considering the service provided to him as renting of motor vehicle and thereby paying the compete service tax itself on reverse charge mechanism basis after taking the abatement of 60%i.e @ 6% and due to such arrangement the service provider is also not filing the service tax return as he is not paying the service tax. Conflict - In this given case what penalties are attracted to the service provider for non-filing of service tax return and whether the payment of service tax by the service receiver hereby will be considered as an default ?

Replies (2)

CA Saurabh Singh

Practising Chartered

974 Points Joined June 2015

Hi Kapil,

The CBEC inposes penalty for short payment or short charging of service tax. In your case please specify whether the bill issued does mention the amount of service tax. As how can the receiver recalculate the service tax payable which is already mentioned by the provider in the bill.

karan jit singh

Consultant

1299 Points Joined November 2010

Originally posted by : kapil dev choudhary
	Fact - The Service Provider is an proprietorship concern registered with service tax department for providing tour operator services on which 70% abatement is available to the service provider thus only 30% of 15% i.e 4.5% Service tax is payable on the value of services provided. Issue- In the case of above mentioned service provider , the service receiver is an private limited company which is considering the service provided to him as renting of motor vehicle and thereby paying the compete service tax itself on reverse charge mechanism basis after taking the abatement of 60%i.e @ 6% and due to such arrangement the service provider is also not filing the service tax return as he is not paying the service tax. Conflict - In this given case what penalties are attracted to the service provider for non-filing of service tax return and whether the payment of service tax by the service receiver hereby will be considered as an default ?