Invoice of car hire service provider - 30/2012

990 views 7 replies

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3485 Points Joined June 2011

Friends

I believe the undermentioned topic is being widely discussed everywhere these days under new service tax applicability regime.

We have received car hiring for passenger service from a proprietorship entity registered with Dept. The invoice reads as follows:

Basic value 729

service tax -- 12.36% on 40% 36 (means the SP uses abatement provisions)

Total payable 765

My understanding is that pursuant to notification 30/2012 under partaial reverse charge mechanism, we pay to Govt. Rs 36 ie 100% as service receiver and deduct this amount while paying to SP in addition to applicable TDs under Income Tax Act 1961.

Am I correct.

Regards,

Replies (7)

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3485 Points Joined June 2011

Friends and Experts

Any responses please.

Regards,

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3485 Points Joined June 2011

Friends

Any feedback please.

Regards,

CA Ganesh Karthik

Chartered Accountant

368 Points Joined July 2008

Sir,

The Service Tax which is to be paid by the service receiver is in addition to the amount charged by the service provider. This is not required to be deducted from the amount payable to the service provider.

It is your liability to pay the service tax. The service provider is not liable for your portion of service tax.

This is not in the nature of TDS, where in you deduct the tax and remit to the government.

This is an additional liability of the service receiver, which has to be paid by service receiver itself and later on can be taken as CENVAT credit.

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3485 Points Joined June 2011

Thanks Ganeshji for your clarification. It is indeed well expalined.

Regards,

RENGARAJ R.K

ADVOCATE

7557 Points Joined October 2010

The reverse charge mechanism challans are to paid by cahs and can be used as cenvat documents for adjusting the same in the output tax, provided such services are in relation to your output service. For other points, CA Ganesh Karthik has already explained.