Service tax applicability to bus transporter

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

10 February 2013 dear sir/madam,

my client has 6 buses. He has entered into a contract with corporate entity where hi charges a monthly fix rate for a bus and a route is fixed for each bus.

If bus runs for extra k.m. as fixed by contract then additional fare would be charged for that excess k.m.

Now main question is that whether he would be liable to charge service tax..? If yes then at what value..?
As per reverse charge mechanism who will be liable to pay service tax..?

And he has 2 other buses also which runs on order. Whether service tax is applicable on the same or not..?

Kaushik Vinod

Kaushik Vinod (Expert)
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11 February 2013 If your Client is having the Permit of Contract Carriage then the same is exempt under item No.23 (b) of Notification No.25/2012-ST dated 20-06-2012.
Transport of passengers, with or without accompanied belongings, by -
(b)a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire;

In my opinion the regular use of buses is coming under the exemption Clause and the same is exempt.

Buses running on order does not fall under the definition Clause and taxable.

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

11 February 2013 Thanks Mr. Kaushik..

Now in the above case if he owned 4 buses out of 6 and take 2 buses on rent from another person where driver's salary and disal expenses will be born by owner of bus then what will be his liability towards tds for rent paid to these 2 buses..? At what rate and under which sec tds will be deductiblr..?

What will be applicability of service tax to the owner of these 2 buses who provides it on rent..? Assume that total rent exceeds Rs. 10 lakhs in a year.

In short, My client got a contract for 6 buses where he owned 4 buses of his own and give subcontract to another transporter to provide 2 buses to him at monthly fix rent..

My client is proprietor and another subcontractor who will provide 2 buses is also proprietor.

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