Service tax reversal for car hire

Yes, Servise tax under RCM is applicable.

Dear Mr. Murugan,

Sec 68(2) of Fin Act' 94 read with Notifcation 30/2012-ST provides for reverse charge mechanism where in S.No 7 of the said notification requires service receiver to pay service tax in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business.

in the instant case, since banks who are not in the similar line of business, the cars designed to carry passengers are if hired by them, then service tax shall be paid on 40%/50% of the value depending on abatement/without abatement.   

Yes reverse charge is applicable