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St on hiring of motor vehicle one company to other company

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(Querist)
20 September 2016 Dear professionals,

One company gave Motor vehicle on Hire to other company, this company uses motor vehicle for business purpose.
is the reverse charge mechanism applicable to the company ?
if any benefits are available to both service provider and service receiver ?

plz advice on service tax applicability.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
20 September 2016 1 No reverse charge applicable as service provider is a company.
2 Service tax payable on 40% value provided fuel cost is included.
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ramanamma

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ramanamma (Querist)
21 September 2016 But the company uses motor vehicle for business purpose not for carry passenger.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
21 September 2016 Then no abatement service tax payable on hire charges.
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ramanamma

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ramanamma (Querist)
21 September 2016 Sir,
for this TDS U/s 194I is applicable @ 2% or 10% ?

But the company doesn't take any cenvat credit on that vehicle.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
21 September 2016 194I is applicable at 10%. Don't include diesel expenses for service tax.

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