S.tax on motor cars hire for transportation of employees ?

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Gaurav Jindal (Querist)
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09 May 2013 We as a company provide facility to our employees for their transportation from office to home and vise-versa for which we use motor cars of one of our group company who charge us in RS. per KM during the month.

Our group company is not in business of rent a cab but it is in the retail business.

My question is..
Whether our group company is liable to charge service tax on the invoice raised by them.? if yes then whether they can claimed abatement of 60% which is available on rent a cab services?

Arun Kumar Singh

Arun Kumar Singh (Expert)
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10 May 2013 As a business entity you are liable to pay service tax on reverse charge system after the abatement of 60%.

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Arvind Tiwari

Arvind Tiwari (Expert)
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11 May 2013 Dear Gaurav,
Your group company should charge ST on the provision of service of Renting of Motor vehicle by taking abatement of 60% of Value.
Reverse charge is not applicable to your situation as both Service provider as Service receiver is company.

Arvind 9322368699

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Gaurav Jindal

Gaurav Jindal (Querist)
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13 May 2013 Thanks for your reply.

I agreed that reverse charge is not applicable to us.
But as i mentioned in my question that our group company is not in the business of rent a cab/renting of motor vehicle, then whether our group company can claim abatement of 60%?
Because as per the definetion of rent a cab operation services- it means a person who is in the business of providing cabs on rent. on the same lines renting of motor vehicle may also have the same meaning
Please suggest

With Regards
Gaurav Jindal