RENT A CAB SERVICE

[Tax Baniya]

PLEASE CONFIRM IN THE SERVICE TAX RETURN FILING ST-3 IN CASE OF FILING BY THE SERVICE RECEIVER UNDER REVERSE CHARGE MECHANISM

IT WILL SHOWN AS AN ABATEMENT OR PARTIAL REVERSE CHARGE.

[YAGAY and SUN]

Dear Tax Baniya,

It can be both. If you had paid service tax on 40% of the value of the bills raised by the service provider and the service provider had declared that they had not availed the CENVAT credit on Inputs, Input Services and Capital Goods. You would it shown as PRCM after availing the abatement notification.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Reverse charge mechanism: service tax can be shown as abatement or partial reverse charge depending on CENVAT declaration.
When a service recipient files ST-3 under the reverse charge mechanism, the liability may be shown either as an abatement or as a partial reverse charge; if the recipient has paid tax on a proportion of the invoice value pursuant to an abatement and the provider has declared non availment of CENVAT credit on inputs, input services and capital goods, the recipient should record that portion as partial reverse charge mechanism after availing the abatement.