service tax credit on rent a cab service eligble-reg

[Ramakrishnan Seshadri]

Dear Sir,

We are manufacturer of automobile parts and having 3 plants situated at different places. We have entered into contract with the transport service providers for transporting our staff from specific points to our units. The transporters are registered with the service tax department and we are discharging service tax for the 40% of the bill value.

Now our question is whether service tax paid on rent a cab service is eligible or not.if not what is the reason

Could anybody give us opinion .

Thanks & Regards,

S.Ramakrishnan

AI Summary

Cenvat credit on rent a cab service disallowed where motor vehicle exclusion applies, limiting input service credit.
Cenvat credit is not available on renting a cab for staff transport because the input service definition excludes services related to motor vehicles, and motor vehicles are not treated as capital goods for this purpose unless they are used to provide taxable services that permit credit; absent that use and tariff classification, rent a cab charges are non creditable.