Service Tax provision for hiring of motor vehicle

[saurabh bhatiya]

Dear Sir,

We are ltd company & hiring motor vehicle along with driver on contractual basis for the year & pay bill monthly to contractor.

My query is that

1) whether this service fall under reverse charge mechanism or not & if yes , what will be percentage?

2) Is there any abatement notification for this service?

Please reply...

AI Summary

Reverse charge liability for hiring motor vehicles with driver applies to corporate service receivers, with abatement provisions.
Renting or hiring of motor vehicles designed to carry passengers, procured by a body corporate with driver on a contractual monthly basis, is subject to the Reverse Charge Mechanism with the service receiver liable for service tax; reverse charge does not apply if the service provider is a body corporate. Abatement for this service is available under Notification No.26/12-ST (Serial No.9 as amended), and the reverse charge rule is set out in Notification No.30/12-ST (Serial No.7(a) & 7(b) as amended.