20 December 2013
Reverse charge in renting or hire of Motor vehicle designed to carry passengers
1)Reverse charge when renting to a person who is not in similar line of business.
2)Service Provider should be HUF, Individual, firm
3)Service receiver – Business entity registered as body corporate
4)Tax on 40%, if Cenvat credit is not availed by the service provider – No Cenvat credit in most of the cases – hence cost to company.
5)If motor vehicle is taken on hire (operating lease) without driver, it is ‘transfer of right to goods’. Then it is deemed sale of goods and Vat will apply – not service tax.
CAclubindia
