Service tax payable on rent-a-cab service

Page no : 2

Aman (Finance Professional) (604 Points)
Replied 05 March 2014

becuase there is no service tax on 60% of bill value but only on 40% as per RCM rule in case of abatement.....and another thing is that service receiver liabilty becomes to be same in both the cases whether its abated or non abated.....

Smruti (CA) (183 Points)
Replied 05 March 2014

Thanks . Now it,s clear. i was in confusion that if service receiver liability is 100% then he is required to pay @ 12.36%

Aman (Finance Professional) (604 Points)
Replied 05 March 2014

no its not like that....

Kriti (Article Assitant) (106 Points)
Replied 05 March 2014

Aman

One thing just popped up in my mind, you said "SERVICE PROVIDER IS NOT CHARGING SERVICE TAX THEN IT MEANS ITS A CASE OF ABATED VALUE".

What if the SP is availing exemption limit of Rs 10 lacs, then the value will not be abated also Service Tax will not be charged!!

Aman (Finance Professional) (604 Points)
Replied 05 March 2014

i just gave an example.. but if SP is availing exemption limit of Rs.10 lac then also there is a liability of service provider to pay 40% of service tax..

Kriti (Article Assitant) (106 Points)
Replied 06 March 2014

Dear Aman

I think you got me wrong.

I am confused over how to decide whether the SP is using Abated valur or Non-abated value!! i.e. if we decide on the basis of Invoice then there exists a chance where he might not be availaing Abated value and still wont charge ST on it.

I faced same case in my articleship and was unable to decide except to call the SP and ask him.

Precisely the same thing has also been said by CA Raj Kumar (IDT faculty ETEN Delhi) but this was my question and I am still waiting for his response on the same.

Aman (Finance Professional) (604 Points)
Replied 06 March 2014

yes u r right only SP can told about this....

CA Ankita Karia (CA) (100 Points)
Replied 21 March 2014

I am bit confused about service tax. pls clarify.

1. 10 lakh exemption is available once in life time or every year?

2. In case of abatement, SP should collect only abated value or 100%.?

3. In case of reverse charge, company pays on behalf of SP. Company pays 100% or 40%?

what if company paid to govt 100%. ?How can we know about it?

4.While filing St return, how should we show the details for tax paid by companies?

Thanks .

satya (Executive Excise) (1839 Points)
Replied 21 March 2014

1) Once in a lifetime only

2) abatement is for calculation of Service Tax purpose and not for Ass.Value, that value always 100% only.

3) In RCM , receipient burden is 40% only whether abatement or non abatement.

4) for this point pl see enclosed snapshots of ST3 return.

Attached File : 42215 1299639 st3 rent a cab.zip downloaded: 251 times

1 Like

Kriti (Article Assitant) (106 Points)
Replied 23 March 2014

Ankita In any way you have to pay ST on 40% of the value under reverse charge. As in case of abatement ST is payable on 40% of value and in case of non-abatement 40% ST is payable under reverse charge.

Kriti (Article Assitant) (106 Points)
Replied 23 March 2014

Satya Sir I am confused over availability of rs 10 lacs exemption once in a lifetime. I think its available on the basis of status of assessee based on his turnover in each prev financial year. And nowhere its written its available once in a lifetime.

SUNIL BOHRA (PROP) (21 Points)
Replied 10 July 2014

Dear Sir

From July 2012 Service tax pay liability under rent a cab is of service reciver. But due to not knowledgement Service Tax Provider & Reciver both have paid service tax @ 12.36*40% of service. Now Can Service Provider can take such amount refunf from service tax department.

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 10 July 2014

Dear All, Kindly read my Article on Rent a Cab Service which is also published in R.K. Jain's Service Tax Review STR issue dated 01-06-2014 (Volume: 34, Part 5) 2014 (34) STR J153

/articles/service-tax-on-rent-a-cab-service-a-guide-20149.asp

I hope it would clarify most of your doubts.