Question: A Company providing radio taxi service is giving its cab to its chauffer and charging a monthly rental of Rs 22,000 which includes Road Tax and Insurance.
The Company has taken the cabs on loan from a bank and pays a monthly installment of Rs 14,800.Currently bank is the owner of the cabs.
The ownership of cab will be transferred to the chauffer when the loan is repaid fully by Company, till then Company will continue to charge Rs 22000 from the Chauffer. The chauffer will not pay any kind of money to the Company except monthly rental.
1.Whether Service tax will be charged from Chauffer or not on billed amount i.e, Rs 22000 ?
2.Under which head this rental income shall be booked?
CAclubindia
