SERVICE TAX PAYMENT

[SURYAKANT MITHBAVKAR]

We have received bill from travel agent for vehicle hire charges who is registered under Service tax act.

Regarding service tax he has mentioned service tax to be paid by service recipient by virtue of Notification No.30/2012 ST dated 20.06.2012 .

The above case if we want to take service tax credit can we pay 100% service tax and take credit for the same.

Pl. advice

AI Summary

Service tax on vehicle hire: recipient's payment obligation depends on abatement and supplier ownership, credit generally restricted.
Service tax liability for vehicle hire supplied by a travel agent hinges on abatement and ownership: if the supplier availed abatement, the recipient pays tax on the abated value; if not, the recipient pays tax on fifty percent of the value with the supplier liable for the remainder. Input tax credit on vehicle hire is generally disallowed, though it may be claimable where the travel agent owns the vehicle.