Rent-a-car

[Ganeshan Kalyani]

Dear Sir,

I would request to briefly explain with all scenario for applicability of service tax under reverse charge is case of rent a car.

As a service recipient whether service tax is payable under following circumstances.

1) A motor car hire - Non-air-conditioned

2) A motor car hire - Air-conditioned

3) A bus for pick-up and drop for employee from home to factory and back - Non-Air-conditioned.

4) A bus for pick-up and drop for employee from home to factory and back - Air-conditioned.

5) A metered taxi is hired whether air-conditioned or non-air-conditioned is exempt from service tax (hope i am right on this)

6) A radio taxi is hired whether air-conditioned or non-air-conditioned is taxable (plz validate my understanding)

7) A air-conditioned or non-air-conditioned bus is hired for a Finance conference to be held at different location. (whether service tax is payable)

I would request to share your view in above scenario where most of the tax executive are scratching there heads for clarity. It would be clear understanding to all the users.

regards,

ganesh

AI Summary

Service tax on radio taxi services applies irrespective of air-conditioning, subject to radio-taxi definition and abatement.
Services by radio taxis or radio cabs are subject to service tax whether or not air conditioned; the rent a cab abatement will be extended to radio taxi services. A "radio taxi" is defined by two way radio communication with a central control office and GPS/GPRS enabled tracking. Debate exists on whether real world operators meet both technical attributes, and contributors advise conservative treatment and departmental clarification where uncertainty remains.