Service tax is applicable on transport service.

This query is : Resolved

Sachin S Joshi (Querist)
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02 January 2013 Dear Sir/Madam,

Our compnay is doing manufacturing of automobile componentes; for staff transportation we have taken Bus&Sumo on hire.
On transportation charges service tax is applicable or not? If applicable

The percentage of service tax?; Transporter or company needs to pay the service tax; if company's liability then; Can company take the cenvat credit of payment made towards service tax payment?

Kaushik Vinod

Kaushik Vinod (Expert)
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04 January 2013 Hi Sachin,

Yes Service tax applicable in your case and CENVAT in available if you satisfy the following conditions.
Both Rule 2(a)(C) and Rule 2(l) are applicable.
If the Services of hiring of Motor Vehicle are used this is eligible Service provided the motor vehicle is a capital goods.

Refer Notification No.30/2012 Reverse Charge and 26/2012 Abatement in Service tax
The Taxable Service provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory;

Abatement is availed- 100% by the Service Recipient
Non Abated Value-60% Service Provider and 40% by Service Recipient

Thanks

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Sachin S Joshi

Sachin S Joshi (Querist)
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04 January 2013 Dear Sir,
Thank you very much.

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