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Service tax on cab

Antony Raj (Accountant) (81 Points)

24 October 2013

Dear All,

Please guide my for the following case.

We are hiring a Cab (Tata Sumo) for Pickup and drop the employees. In the free time we are using the same for material delivery and collection. The Cab fellow is making two separate bill for the above said cases with out any service tax. Because he is not registered ST. He is charging Rs.1000/- per day for Pickup and drop of employees and Rs.9/- Per KM for Inward and outward.

Now kindly guide me that, whether Service Tax is applicable in both the cases?

If it is applicable is it our liability to pay the ST and how many percent we have to pay?

Whether GTA is involved here?

Kindly Guide me.

Thanking You,

ANTONY RAJ.

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3 Replies

Jayam Ramesh K C (Group Chiefr Accountant) (99 Points)
Replied 24 October 2013

Dear Mr Antony

Please note that there is a amendment in Service Tax from July 2012 and reverse charge mechanism applies.In reverse charge the reverse charge you have to pay tax on the service received by you. There is no exemption limit available to the receiver. But abatement is available for rent a cab services.

In your case the service tax is payable by you only. No matter if the cab service is a registered or not. That is not your botheration.

Now service tax is payable as follows

Example

Service received by you RS 1000.00

Service tax payable is on 40% RS 400.00

service tax to be paid by you RS 49.44

( Jayam Ramesh K C)

Jayam Ramesh K C (Group Chiefr Accountant) (99 Points)
Replied 24 October 2013

Dear Mr Antony

This is not GTA in this this case.

( Jayam Ramesh K C)

Prabhat Kumar (Advocate & Consultant) (1912 Points)
Replied 25 October 2013

This is of course not GTA.If you are a bussiness entity registered as body corporate you are liable to pay ST under reverse charge mechanism.However your liability will be 100% if bill is raised on abated value and it will be 40% if the bill is raised on non abated value.