SERVICE TAX LIABILITY ON PASSANGER BUS

[Mehul Pandya]

DEAR SIR,

IN CASE OF PASSENGER BUS TRAVELING BETWEEN TWO DESTINATION ON FIX ROUTE ON DAILY BASIS. THEY HAVE BOTH AIR CONDITIONED BUSES AND NON- AIR CONDITIONED BUSES. SO AS PER NEW BUDGET NOTI. NO.06/2014 DATED 11.07.14 SERVICE TAX WILL BE APPLICABLE ON THE SAME OR NOT..

PL. GUIDE

THANKS

[Mahir S]

As per the New Budget :-

(i) Service tax to be applicable on Air Conditioned Contract Carriage for transport of passengers,

(ii) Service tax not applicable on Non-Air Conditioned Contract Carriage for transport of passengers .

[Mahir S]

Hence in your case, in simple terms, Air Conditioned buses carrying passengers between 2 destinations on fix route on daily basis shall be taxable.

However, such Non-Airconditioned buses shall be exempt from service tax.

[YAGAY andSUN]

Dear Mehul,

The amended provision reads as

(vii) in entry 23, for item (b), the following item shall be substituted, namely:-

"(b) non-air-conditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; or";

It means the services provided vide non air conditioned buses would not fall under the purview of service tax.

Regards

Team YAGAY and SUN

AI Summary

Service Tax Applicable to Air-Conditioned Passenger Buses, Non-Air-Conditioned Buses Exempt per Notification No. 06/2014. A query was raised regarding the applicability of service tax on passenger buses traveling between two destinations on a fixed route daily, specifically distinguishing between air-conditioned and non-air-conditioned buses. According to the new budget notification No. 06/2014 dated 11.07.14, service tax is applicable to air-conditioned contract carriages transporting passengers. Conversely, non-air-conditioned contract carriages are exempt from service tax. The amended provision clarifies that non-air-conditioned buses, excluding certain services like tourism and charter, do not attract service tax.