vehicle finance is taxable ??

[Mehul Pandya]

Sir,

My query is our is partnership firm willing to start car finance activity.

Is this activity is taxable as we are partnership ??

if yes then pl. guide its category and tax rate..

[YAGAY andSUN]

Dear Mehul,

Such service may come under the purview of Business Support Services/Business Auxiliary Services or Services other than 119 service. Tax would be applicable on the gross value of taxable services and normal tax rate will be charged. Notification 30/2012-ST/20-06-2012 w.e.f. 01-07-2012 would not be applicable in your case.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

Taxability of vehicle finance: Partnership car finance services attract service tax on gross value; normal rate applies. Car finance provided by a partnership firm is taxable as a service falling under Business Support Services or Business Auxiliary Services (or otherwise taxable service); the partnership form does not exempt the activity. Tax is chargeable on the gross value of the taxable service at the normal service tax rate, and the specific exclusion notification referred to is not applicable.