Renting of motor vehicle

This query is : Resolved

Monika Sharma (Querist)
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19 October 2012 iam getting service from a tour operator regarding renting of motor vehicle for travel of my employee locally in delhi. the tour operator is not registered with service tax department.

i want to know that as iam liable to pay tax only on 40%, but if i pay 100% tax then what are the consequences.

secondly whether i can claim credit of service tax on the same or not.

Amit Mundhra

Amit Mundhra (Expert)
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19 October 2012 Assuming, you are a body corporate and receiving service from a non body corporate.

You are required to pay tax only on 40% of the invoice amount. If you pay 100% then it will be excess payment. There are no consequences as such, but you cannot take CENVAT of the 60% excess tax paid.

Monika Sharma

Monika Sharma (Querist)
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19 October 2012 so that means this extra payment of 60% is waste for me

secondly i want to ask that as per defination of input service
" input service excludes services providede by way of renting of motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods"

is this applicable for me, if yes then how i can claim credit of tax paid.

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