Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

RENT-A-CAB Service Tax

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... For Example, Mr Robert opens M/s Robert Rent a Cab service store to be owned by him individually. He takes the Car/Bolero/Bus/Tata from Mr X,Y,Z,P,Q,R individuals motor owner by giving hiring Fees to each of them on monthly basis. Now, M/s Robert Rent a Cab service store give out those motors for Customer uses as:- One bus is being used by One Govt University College on giving a hire charge to .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Robert. Likewise, One Tata is being used by One Industrial Firm of Company Ltd. Likewise, One Bolero is used by One family for a month for visiting interesting sites in the State. From above, please someone clarify Who should be registered to Service Tax Dept and pay Service Tax (Robert or X,Y,Z,P,Q,R)? Who are the SERVICE PROVIDER and SERVICE RECIPIENT here? What do these means .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... if abated condition Taxable is 0% for Provider and 100% for Recipient But but if unabated condition Taxable is 60% for Provider and 40% for Recipient. Please make the billing nature for Service Tax in regards to Sl.No. (1) (2) (3) also. Examine as, Service Tax rate 14% and Mr. Robert gross income has reached 10 Lacs in last financial year. But if, his gross income doesnot reach 10 Lacs yet in .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... any year so far what will be the S.Tax liability for Sl.No. (1) (2) (3) ? - Reply By Arun Kumar Singh - The Reply = The service provider (Robert) will registered under service tax. In case of service recipients are business entity registered as a body corporate they are liable to pay service tax under RCM vide notification no. 30/2012-ST . If service provider is under ssi exemption then recipi .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ent will pay the service tax on abated value at the rate of 14%. - Reply By Renuka Devi - The Reply = Thanks to dear Arun Kr. Pls Arun Or any Other, try to give more detail answer as to how may doubted questions go (pls review the question). - Reply By Yash Goyal - The Reply = Dear Renuka, Firstly it must be noted that there are two independent transactions in the case discussed. Firstly se .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... rvice is being provided by the individual car owners to M/s Robert.. And secondly service is being provided by M/s Robert to its customers. Accordingly the service tax implications will have to be analysed on both the transactions independently. In the first case: Hiring of cars by car owners to M/s Robert. The declared service entry no 6 is relevant which reads as - Transfer of goods by way of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... hiring, leasing, licensing or in any such manner without transfer of right to use such goods The expression without transfer of right to use such goods is important. Kindly clarify whether the owners give their vehicles on hire along with driver or they hire out only the vehicles and driver is employed by M/s Robert. In my view, if the vehicles are given along with drivers, then the control .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... is with the owners and hence right to use the goods is not transferred. Thereby it will be covered under the above declared service and service tax will be leviable on the same. The owners shall be the service providers and they will have to obtain registration and discharge service tax liability. However also note that there is a small service provider exemption with threshold limit of INR 10 Lac .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... s available. Also a threshold limit of INR 9 Lacs is available for obtaining service tax registration. The provisions of reverse charge will not be applicable in this case. In case only the vehicles are given on hire and drivers are employed by M/s Robert then it can be said that the control over the vehicles has been given. Hence the transaction will not be covered under the definition of servic .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e and consequently service tax law will not be applicable. The same is a deemed sale as per the constitution and hence sales tax / VAT will be leviable on the same. The liability of VAT / sales tax is to be decided based on the respective state laws. Threshold exemptions may be available in VAT laws also. Hope this clarifies the issue with respect to first transaction. About the transaction of r .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... enting of vehicles by M/s Robert, as per my understanding of your case and considering the general industry practise, the transaction will be covered under the rent a cab service. I agree with the view of Mr. Arun Singh and M/s Robert will have to obtain service tax registration. The provisions of reverse charge will be applicable subject to the conditions therein. Also the abatement can be claime .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... d by M/s Robert subject to the condition of non availment of cenvat credit. Kindly refer respective notifications for complete details. The small service provider exemption is very clear that if in previous year the turnover has crossed INR 10 Lacs then service tax will be leviable from the first rupee of service provided in current year. This exemption can be claimed only if the value of service .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... provided in last year is less than INR 10 Lacs. Regarding the provisions of reverse charge. If abatement is claimed then service tax is leviable only on 40% / 50% of the service value. The entire service tax chargeable in this case is required to be paid by service recipient, subject to fulfilment of other conditions. If abatement is not claimed then service tax is leviable on entire service v .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... alue. In this case 40% of total service tax chargeable will be paid by service recipient and 60% to be paid by service provider (M/s Robert). Thanks Regards CA Yash Goyal - RENT-A-CAB Service Tax - Query Started By: - Renuka Devi Dated:- 8-8-2015 Service Tax - Got 3 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates