Service tax payment under reverse charge on rent a cab service

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Dear Sir,

AS PER NOTIFICATION 10/2014 DATED 11.07.2014 IS SERVICE RECEIVER W.E.F 01.10.2014 WILL BE LIABLE TO PAY SERVICE TAX UNDER REVERSE CHARGE BASIS ON RENT A CAB SERVICE ON 50% OF THE BILL AMT EVEN IF SERVICE PROVIDER IS CHARGING ON 60 % OR NOT CHARGING SERVICE TAX AT ALL.PLEASE EXPLAIN , THANKS and REGARDS.

AI Summary

Reverse charge liability on rent-a-cab services requires the service receiver to pay tax on half the service value.
Notification 10/2014 revised reverse-charge payment for rent-a-cab services so that the service receiver must pay service tax on fifty percent of the service value. Other provisions remain intact: previously a receiver paid tax on the full value where the provider did not charge tax and paid on a smaller portion when the provider had charged tax; the amendment fixes the receiver's payment obligation at fifty percent irrespective of the provider's invoicing allocation.