Road tax collected is subject to service tax ?

This query is : Resolved

UMESH RAVANI (Querist)
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26 November 2008 Two wheeler dealer is collecting road tax from buyer of vehicle and repaid to the RTO agent who are working on their behalf. whether amount collected by dealer is subject to service tax if yes then repaid the entire or portion of it to RTO agent is allowable thereon as input credit. and if dealer is not liable then Agent is liable for it. please repy immediately.

thanks,

G Muralidharan

G Muralidharan (Expert)
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27 November 2008 Two wheeler dealer does only sale of goods. Here the service element involved is only collection and Payment of Road tax. Herein also apart from Road tax, if any excess amount is charged, then only such excess amount would be liable for service tax.

Taxguy

Taxguy (Expert)
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27 November 2008 He acts as trustee of Government for collecting Road tax. hence service tax not applicable, it is just like collecting VAt and other indirect taxes.

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G Muralidharan

G Muralidharan (Expert)
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11 December 2008 I am telling about the excess amount collected beyond road tax for which my view is Service tax would attract.