Service tax on vehicle hire

whether reverse charge will applicable in case where we have entered contract for hire of vehicle for the purpose of transportation of goods.

Replies (4)

I feel hiring of vehicle for carrying passenger is liable for reverse charge mechanism subject to abatment availed or not.

hiring of vehicle for transport of goods is not liable to revers charge.

however please wait what others reply to this thread.

regards

Services will be fall under the category of GTA. 

Hi Atul ,

Your question is wague, if you have taken services of GTA and you are a company you need to pay tax on reverse charge or if you are taking vehicle on rent n drivers are your employees then no service tax as the same will come under negative list. But in the second case the cost of trasportation shall be includable in assessable value if your goods are liable to excise duty as per rule 5 of valuation rules.2000. You have to go by rule 5

But in case the transportation is in the nature of GTA person liable to pay freight needs to pay service tax provided the GTA is not a company.

Giving on hire vehicle for transportation of goods is not covered under reverse charge. Also, if the vehicle is a means of transport and is hired to a GTA, then the same is exempted.

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