Input credit on reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2012 We engaged in renting a car to passenger(Private limited company). We taking car on hire charges basic from individual. he has not liable to pay service tax(taken SSI Exemption)
If individual provided us 100 Rs. services. What is our service tax liability under reverse charge?(12.36 or 4.944% as per abatement) And Can We take input credit of above payment for time of payment of our collected service tax?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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01 December 2012 The service recipient will have to discharge his liability even if service tax is not payable by the service provider.

However, the service can avail benefit of any abatement available in respect of such services.

Accordingly, your liability will be 4.944%.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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01 December 2012 If the Service receiver is not liable for service tax then it is obviuous that he is not claimimg any abatement as such.
Accordingly, you are liable for 40% of service tax under reverse charge i.e 40% of (Rs. 100*12.36%) i.e Rs. 4.944.
The Service provider is liable for the balance of Rs. 7.416 only if he is not SSI and not taking any abatement.

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CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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01 December 2012 No manufacturer or no service provider other than those mentioned below can avail credit on cab service.

-courier agency
-tour operator
-rent-a-cab
-cargo handling agency
-goods transport agency
-outdoor caterer
-pandal or shamiana contractor