Doubts on service tax???

This query is : Resolved

SANJAY (Querist)
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04 September 2013 Dear all,

Please clarify me on following?

A company having a main business of trading goods which is normally sales and purchases the goods, gives its Vehicles on hire to other persons and charge Service Tax on 40% taxable value and deposited it accordingly. Now company is also taking vehicle on hire from individuals for its employees on monthly basis.

1. Whether Reverse charge is applicable to the company as it is Service Receiver also?

2. Is it possible that company can pay service tax as a service receiver as well as service provider in same service?

3. Can it adjust the service tax payment from receiving services with the payment of providing services? or it has to pay service tax as both Service Provider and Service Receiver?

Please reply soon!!!

Thanks in advance

Sanjay Verma

Ganeshbabu K

Ganeshbabu K (Expert)
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04 September 2013 1)No service tax as a service receiver on transport of employees...as it is included in negative list

2)No need to pay service tax as a service receiver and more over Transport of goods by road is in negative list (except Goods Transport Agency (GTA) and Courier),,So Go accordingly,,

3) Cenvat credit cannot be used to pay tax by service receiver. Service tax as to be paid by cash only i.e. GAR-7 challan.

Thanks & regards
Ganesh babu k

SANJAY

SANJAY (Querist)
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05 September 2013 But sir, in this case company provide the car to its employees for official and personal purpose also, only one employee is using one car, which is hired from outside.

What will be the situation now?

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Ganeshbabu K

Ganeshbabu K (Expert)
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05 September 2013 As you said i consider that car is not used for purpose of transporting employees to office place which is included in negative list
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So it will come under renting of motor car service and which is covered in reversecharge
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So if bill is in the name of employee NO reversecharge applicable,,and if bill is in the name of company and service provider is Individual, HUF, proprietary or partnership firm, AOP located in taxable territory reversecharge applicable

***Tax on 40% of value by service receiver and Nil by service provider. If the service provider intends to avail Cenvat credit, he can pay service tax on balance 60%. Thus, service receiver is liable to pay service tax only on 40% value.