Service tax on person provide car to taxi services like ola

A person Mr.X is providing 10 cars to taxi services like UBER or OLA.

-Mr. X is liable for all expenses related to running and maintainence. such as driver, fuel repairs etc.

- Company like Uber or Ola is providing customers to Mr. X besides company is giving (say)Rs. 30,000 per month per car or 85% of fare whichever is higher

In this case what is the service tax liability of Mr. X.

Will any reverse charge mechanism apply, (Mr. X is an individual)

If service tax is applicable what will be the rate?

Replies (1)

As a general rule in Service Tax regime, the person who is receiving Services (popularly known as the Service Receiver or the Service Recipient) pays the Service Tax to the person who provides Services (also known as Service Provider) and in turn, the same is remitted to the governmental authorities [as a result of which these Taxes are known as indirect Taxes]. However, having a small variant of the above convention was brought in to directly levy the Service Tax from the Service Receivers, which is the crux of Reverse Charge Mechanism.

 if hit by the requirements,

  • the business has to obtain a Service Tax Registration within 30 days of applicability of the requirement,
  • make payment of Service Tax by within the due dates as applicable and
  • file half-yearly Service Tax returns.

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