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Service tax by employer

CA Ankit Adhyaru (Partner - Yusuf Ankit & Co.) (201 Points)

20 February 2015

A Company provides transport facility to its employees between residence and work place at a concessional rate through buses owned by the company. Gross value recovered from employees in this regard during the year is Rs. 50 lacs. Whether a company has to pay service tax on this as a rent a cab operator service?

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4 Replies

J. K. Ratan (Compliance Advisor) (794 Points)
Replied 21 February 2015

Dear Ankit As per mega exemption 25/2012-ST dated 20-06-2012 a contract catriage for transportation of passengers excluding tourism, conducted tour, charter or hire are exempt from service tax. Contract carriers means a motor vehicle which carriers passengers for hire or reward. It includes maxicabs and motor cars not charging separate fare from passengers.

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Dharmesh (C.A.) (47 Points)
Replied 22 February 2015

Hi Ankit

Transporation service by employer to employee is a service as defined in service tax law. Further concessional rate recovered from the employees are the consideration for the service hence will liable for service tax.

Further, this service is not covered by negetive list or megha exemption list hence it will be liable for service tax.

Regards

Dharmesh