RCM in regard Rent a cab services

[Asked by Guest]

Dear Expert,

Please guide, RCM of rent a cab services.

with it, please guide about TDS implication on service tax part for all (e.g. contractor and others)

Regard

Vikram

[Ganeshan Kalyani]

Please refer Notification No. 30/2012, the relevant portion is given below.

7(a) in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business (b) in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on non abated value to any person who is not engaged in the similar line of business

Nil 11[50%]

100 % 12[50%]

[Ganeshan Kalyani]

TDS shall be deducted on the amount before service tax I.e. on basic amount only.

Ganeshan Kalyani ji, thanks you so much,

[YAGAY and SUN]

If the service provider issue an invoice on which service tax is included in the amount of services so provided then TDS would be deducted on the amount plus the service tax portion also. However, no service tax would be deducted on the portion which would be deposited under reverse charge.

[DR.MARIAPPAN GOVINDARAJAN]

In my view service tax is not included for TDS purpose.

[Ganeshan Kalyani]

Refer Circular No. 1/2014 dated 13-1-2014 for TDS not to be deducted on service tax component charged on the invoice separately.

[YAGAY and SUN]

scenario would be different if ST is included in the Bill amount of the services so provided.

[Ganeshan Kalyani]

If the service tax amount is included in the bill amount, then TDS would be deducted including the tax amount. This is because the notification states that if TDS shown separately on invoice then only basic amount I.e. the amount before service tax shall be considered for deducting TDS.

AI Summary

Reverse charge on rent-a-cab services affects TDS: TDS on basic amount if tax shown separately, otherwise on gross.
Reverse charge applies to renting of motor vehicles to persons not in the same business, with different treatment for abated and non abated values under the Notification. For TDS, if service tax is shown separately on the invoice TDS is on the basic amount only; if tax is included in the bill TDS is on the gross inclusive amount. Service tax amounts payable under reverse charge are excluded from the recipient's TDS base for the portion deposited under reverse charge.