Service tax on hire vehicle

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 August 2013 A car is taken on monthly rental of Rs 18,000/- PM excluding Fuel charges. If fuel charge spend by the tenant is Rs 10000/- pm, then on what amount the service Tax liability will arise. if the Tenant follows reverse charge mechanism of service Tax.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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14 August 2013 The liability will arise on Rs. 18,000. Expenses on fuel charges will NOT be deducted from the rental amount.

Service recipient can claim abatement of 60%.

CA Suresh Jain

CA Suresh Jain (Expert)
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15 August 2013 The Fuel charges incurred by the person taking car on hire is not includible in value of taxable service. The RCM depends on the constitution of the service provider and receiver of the service.

disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case

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