Service tax on bus operators

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 February 2015 MY QUERY IS THAT WILL SERVICE TAX BE ATTRACTED WHEN PRIVATE BUS OPERATORS GIVE THEIR VEHICLES TO SCHOOLS FOR PLYING STUDENTS FROM THEIR HOMES TO SCHOOL AND BACK.
ALSO WHAT WOULD THE ANSWER BE IF THE SAME BUS OPERATOR GIVES HIS BUSES ON HIRE BASIS FOR PICNICS TO THE SAME SCHOOL OR TO OTHER PEOPLE. THANK YOU IN ADVANCE.

TKKKKKK

TKKKKKK (Expert)
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12 February 2015 If service is provided to educational institute, it is rent a cab service to educational institute and exempt via mega exemption notification no. 25/2012.

The service is exempt no matter it is transportation of students from home to school etc and for picnic.

But if same service is provided to other persons , it is taxable because it is not auxiliary education services.

Querist : Anonymous

Querist : Anonymous (Querist)

12 February 2015 THANK YOU FOR THE REPLY ALSO I WOULD LIKE TO KNOW IN CASE THE PRIVATE BUS OWNER IS ONLY PROVIDING SERVICES TO OUTSIDERS FOR TRIPS WILL THIS BE CHARGED TO SERVICE TAX, IF YES THEN WHO IS RESPONSIBLE FOR PAYING THE TAX AND IS THERE ANY EXEMPTION LIMIT ON THE SAME?

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TKKKKKK

TKKKKKK (Expert)
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16 February 2015 It is renting a cab service and taxable. Service provider is required to charge service tax in bill. Exemption is up to Rs. 10 lakh turnover -small service provider exemption.
Reverse charge mechanism is also apply for rent a cab service when service is provided to body corporate. 50% of 12.36% tax should be charged in bill if abatement is not claimed.

Abatement is available for rent a cab service if cenvat credit for input , input services and capital goods is not taken. Abatement rate is 60%. So service tax should be charged on 40% of 12.36% if abatement is claimed.

When reverse charge mechanism is applicable and abatement is claimed, partial reverse charge will be applicable and 40% of 12.36% is payable by company- service receiver and 0 amount is charged in bill by service provider.

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Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2015 THANK YOU VERY MUCH!!!!