Service tax on hiring a car

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2013 Dear Sir,

Our company has hired a van for the employee for Rs. 33000 per month. The VAN owner/operator is an individual and neither has service tax registration nor he charges service tax in the bill.

In this case we will pay service tax on 40% of bill amount or 100% of bill amount.

Further, we are also hiring car some times for the guests. In the bill of the travel agency neither service tax registration no. is mentioned nor they charge service tax in the bill.

In this case we will pay service tax on 40% of bill amount or 100% of bill amount.

Further, also let me know what is the meaning of the abatement in the simple language.

Regards
Ashok Kumar Modi

CA Mahavir Shah

CA Mahavir Shah (Expert)
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23 February 2013 1. Looking to the facts of your case we would advise you to ask car owner to provide you written certificate that they are not availing any CENVAT credit and are not registered with service tax department as they are not having income exceeding Rs.10 Lacs.

2. In simple term Abatement means reduction in normal rate of tax.

3. So according to us you should pay service tax on 40% of the bill amount only.