Service Tax on Renting and Hiring of Motor Vehicle to carry Passengers

7th November, 2014

By Kaustubh Ram Karandikar

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Overview

Services under Negative List

Applicability of Service Tax to the Service Provider

i] Renting of Motor Cab

ii] Renting of Contract Carriage or Radio Taxi

Contract Carriage:

Maxi Cab:

Radio Taxi:

Applicability of Service Tax to the Service Receiver (Reverse Charge Mechanism)

Meaning of the different terms used above are as follows:

Motor Vehicle:

Business Entity:

Body Corporate:

Association of Persons:

Service tax payable under reverse charge by the receiver of the service

In view of the above, it is advisable though not mandatory for the service receiver to get a declaration on each invoice regarding availment / non availment of credit on inputs, capital goods and input services. This will help the service receiver to decide the quantum of liability payable by him under reverse charge.

Non availability of CENVAT Credit

Non-Applicability of Reverse Charge