Service tax on rent-a-cab service

This query is : Open

Samarth Sharma (Querist)
Follow

14 August 2013 Suppose a Rent-a-Cab Service provider (other than a company) raises a bill of Rs. 10,000 and charges Service Tax thereon @ 4.944%. Hence, the total bill amount comes to be Rs. 10,494.
My questions are:
1. Whether he has taken the abatement?
2. What will be our Service tax Liability under Reverse Charge(as a Corporate entity) to:
a. The Government and
b. The Service Provider?
Now, what if he charges Service Tax @ 12.36%? what would be our liability.
Please help.
Thank you.

CA Suresh Jain

CA Suresh Jain (Expert)
Follow

15 August 2013 If receive receiver is a corporate business entity and service provider is non-corporate entity, the RCM is applicable and he receiver of service is liable to pay service tax @ 40% of 12.36% irrespective of the fact that he has taken abatement.

Please check you can also avail abatement if you satisfy other conditions.

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

Samarth Sharma

Samarth Sharma (Querist)
Follow

15 August 2013 Thank you sir for your reply.

so that means the Service Receiver is going to pay the 40% of Service tax to the government irrespective of the fact that the SP has charged the same in the Bill?

Upgrade to CAclubindia Pro. Subscribe Now!