Whether service provider is liable to pay service tax on 60%of taxable value in case of renting of vehicle.( Provider is not claiming Cenvat credit.
Example
Mr X is a Service provider whose give vehicle to a Company on rent basis for rs 10,000. The company is paying Service tax on 40% of bill amount( i.e on Rs 4,000) to govt under reverse Charge Mechanism. Whether Mr x is Liable to Pay St on Remaining 60% (i.e on 6,000) of bill amount.
03 August 2014
If Provider is not claiming inputs . . Abatement can be taken @60% . . So only 40% is taxable . . So if RCM Applicable-Service receiver responsible to discharge this liability directly to govt. . . If RCM Not applicable-Service provider have to charge 40% of service tax in his invoice and collect from customer and pay to govt.
07 August 2014
If you are service receiver then maximum liability on rent a cab service will not exceed 40% of service tax . . If service provider intends to take cenvat credit on his inputs he has to pay balance 60% tax . . Refer reversecharge notification
CAclubindia
