RENT-A-CAB Service Tax

[Renuka Devi]

For Example, Mr Robert opens M/s Robert Rent a Cab service store to be owned by him individually. He takes the Car/Bolero/Bus/Tata from Mr X,Y,Z,P,Q,R individuals motor owner by giving hiring Fees to each of them on monthly basis. Now, M/s Robert Rent a Cab service store give out those motors for Customer uses as:-

1. One bus is being used by One Govt University College on giving a hire charge to Robert.
2. Likewise, One Tata is being used by One Industrial Firm of Company Ltd.
3. Likewise, One Bolero is used by One family for a month for visiting interesting sites in the State.

From above, please someone clarify –

1. Who should be registered to Service Tax Dept and pay Service Tax (Robert or X,Y,Z,P,Q,R)?
2. Who are the SERVICE PROVIDER and SERVICE RECIPIENT here?
3. What do these means – if abated condition Taxable is 0% for Provider and 100% for Recipient But but…if unabated condition Taxable is 60% for Provider and 40% for Recipient.
4. Please make the billing nature for Service Tax in regards to Sl.No. (1) (2) (3) also.
5. Examine as, Service Tax rate 14% and Mr. Robert gross income has reached 10 Lacs in last financial year. But if, his gross income doesnot reach 10 Lacs yet in any year so far what will be the S.Tax liability for Sl.No. (1) (2) (3) ?

AI Summary

Rent-a-cab service tax: liability depends on control, abatement and reverse charge allocation between provider and recipient.
Two transactions must be analysed separately: owners-to-Robert and Robert-to-customers. If owners supply vehicles with drivers and retain control, that supply is the declared service transfer of goods by way of hiring without transfer of right to use, making owners the service providers liable to register and pay service tax (subject to small-provider exemptions). If owners supply only vehicles and control passes to Robert, the transaction is a deemed sale subject to VAT. M/s Robert supplying rent-a-cab services must register when turnover thresholds are met and may claim abatement only if cenvat credit is not availed; reverse charge and apportionment of tax between provider and recipient depend on abatement and notification conditions.