Renting or hiring any motor vehicle

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2012 we are a limited company.hired a bus to carry our staff member from station to our office.bus raised the invoice of rs.50,000 on us.the service provider is availing abatement under notiifcation no.26/2012.now whehter we have to pay service tax to service tax department @ of 12.36% of 50,000 =rs.6,180/- or we have to pay only 40% of 12.36% =50000*4.94% = Rs.2,470/-.
kindly calrify

Guest

Guest (Expert)

22 August 2012 In this case the liability to pay service tax rests on the service recipient as per Reverse Charge Mechanism (RCM). The amount liable for tax i.e. taxable value will be 50000*40% = 20000/- On this amount service tax @ 12.36% will have to be paid amounting to Rs. 2472/- Kindly have a combined reading of not. 26/2012 and the provisions of RCM as per Not. 15/2012.