company hiring taxi car

[Dalia Felix]

Dear members,

our company hires  taxi cars from the nearby taxi stand (as and when required) for the travel of officers. Do you think that the 'reverse charge' provisions are applicable in this case? Why?

[YAGAY and SUN]

Notification No. 30/2012-ST has the answer to your query.

[deepak gulati]

Yes there will be "reverse charge" provision as your company is not in the similar line of business also the % of reverse charge will vary as under:

if SP is claiming abatement than 100% reverse charge

if SP not claiming abatement than 60% by SP and 40% by SR

 

Regards

Punit Bansal

Email ID: [email protected]  

[R MUTHURAJ]

Dear Mr.Punit Bansal,

I would like to refer both the notifications viz., Notification No. 30/2012-ST and Notification No. 25/2012-ST.

As per the above, there should be some contract between the service provider and the service receiver in order to attract the Renting of motor Service.

Generally, there will not be any agreement for hiring the taxis which are meant for public use.

Therefore, in my opinion the said hiring will not be subject to the service tax on reverse charge mechanism.

Any comments / feed back are most welcome.

 

Regards,

R.Muthuraj

 

 

[YAGAY and SUN]

Radio Taxis, Auto, meter taxi would not attract service tax under Reverse charge mechanism.

AI Summary

Reverse charge applicability for hired taxis is contested; depends on rental contract presence and statutory notifications.
Applicability of reverse charge for hiring taxis turns on classification and contractual existence: notifications treat renting of motor vehicles as taxable under reverse charge where the receiver is not in a similar business and abatement status affects liability allocation, whereas ad hoc public taxi hires lacking an agreement (including radio, auto and meter taxis) are generally argued not to attract reverse charge absent a contract.