Service Tax on Rent a Cab

[Shashikant Goswami]

Hi,

we are using rent a cab services and paying full rate of service tax on 40% of Invoice value with no availing any service tax input credit.

Am i doing it in correct way?

Please advice.

Thanks

Shashikant

[KASTURI SETHI]

Sh.Shashikant Goswami Ji,

You can avail input service credit under Notification No.26/12-ST dated 20.6.12 as amended vide Notification No.8/14-ST dated 11.7.14.See Para No.1(iii)(b)(ii) of Notification No.8/14-ST dated 11.7.14 for method of availment of cenvat credit.

[Shashikant Goswami]

Thank U Sethiji,

That means i am doing right practice instead of claiming input credit.

So, in that case suppose service provider is availing threshold limit exemption still we need to deposit service tax under RCM on abated value or i need to deposit service tax on 50 % value of invoice.

Please confirm.

[KASTURI SETHI]

Sir,

If you are a regular visitor of this forum, read the reply of Sh.Akash Deep in his replies. There has been very very healthy and lengthy discussion on the same issue. Pl. trace out and you will learn anew facts.Your problem will be solved. Pl. see the replies of Sh.Akash Deep, Expert for last one month. No need to repeat. If not possible, then let me know.

[Akash Deep]

Dear Sethi ji,

this is so nice of you. i am really surprised that people like you still exist in this world. thanks again. actually shashikat ji has called me and i will reply his query here only.

[Akash Deep]

Der Shashikant,

As i am travelling, i cant reply in detail plz call me if urgent.

[Ganeshan Kalyani]

Sri Goswami ji, it is advisable to pay service tax on 50% of value of service in case service provider has not charged service tax on invoice. It is not sure whether he has availed abatement or his turnover is below the threshold limit. Actually he should endorse on the face of the invoice about abatement / threshold. Thanks.

AI Summary

Reverse charge on rent-a-cab: pay service tax on abated invoice value when supplier hasn't charged and consider cenvat credit. Recipients of rent-a-cab services may either avail cenvat credit under the prescribed notifications and procedures or discharge liability under reverse charge; when the service provider has not charged tax-due to abatement or threshold exemption-practical advice is to pay service tax on the abated invoice value, and suppliers are recommended to endorse invoices to indicate abatement or threshold status.