Rent - A - Cab Orperator service

[SNEHAL SHAH]

R/sir,

For Renta CAB Operator service under Reverse Charge Mechanism having 2 options;

they are :

 

1) without abatement , Service Provider has to pay ST on 60 percent value of services and Recepient has to pay ST for the rest of 40 percent value. 

2) with abatement of 60 percent Service Receiver has to pay ST on 40 percent value.

 Only in cases where the Service Provider is an individual, HUF, partnership firm, AOP or Trust.

 

My question :

Can we take cenvat credit , if payment under reverse charge without abatement option selected .

For Example:

Service Provider:

Rs.100 Assessable value

Service Tax charge on 60 percent (Service Receiver) – 12.36 percent = Rs.7.42

TOTAL Bill Amount: Rs.117.42

Service Receiver:

Pay Service Tax on 40 percent on Assessable Value Rs.100 i.e. Rs.4.94

 

Is it Cenvat Credit eligible Rs.4.94 as input service or not?

If service provider ( Indivisual , properitor , AOP ) not deposit tax any liability in future on company ?

Please suggest.

Thanks and Regards,

 SNEHAL SHAH

AI Summary

Cenvat credit on rent a cab services hinges on whether the rented vehicle qualifies as a capital good under input service exclusion.
Whether tax paid by a recipient under reverse charge on rent a cab services is eligible as Cenvat credit depends on the CCR exclusion: renting of a motor vehicle is excluded from "input service" insofar as the vehicle is not a capital good; if the vehicle qualifies as capital goods for the provider, the exclusion does not apply and credit may be available, while if it does not qualify, Cenvat credit is not admissible, and recipients remain liable to pay tax under RCM.