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 and SUN]

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 on air conditioned contract carriage: AC passenger bus transport becomes taxable while non AC remains outside tax scope.
Service tax is chargeable on air conditioned contract carriage transporting passengers on fixed routes, while non air conditioned contract carriage (other than radio taxi) is not subject to service tax under the substituted entry 23(b), which excludes tourism, conducted tour, charter or hire from that non taxable classification.