TaxTMI 
TaxTMI 
Can we take credit of service tax paid on rent a cab service? In this case the cab is used by the comapany's directors (Construction company) for visiting the site of work...In need of your answer..Thank you.
service tax on rent a cab service
01 Dec 2016 
2 Replies 
1472 Views Asked by
Input tax credit on rent-a-cab services denied when the rented vehicle does not qualify as capital goods under credit rules.
Service tax credit for rent-a-cab services is disallowed where the rented motor vehicle does not qualify as capital goods under the Cenvat Credit Rules. Rule 2(l)(B) excludes renting-of-motor-vehicle services from input credit unless the vehicle falls within specified capital-goods exceptions (use in manufacturing, captive power/pumping, provision of output services, goods transportation for output services, passenger transportation/renting/driving instruction). Vehicles used for directors' site visits do not meet these exceptions and therefore do not confer credit entitlement. (AI Summary)
Service tax credit for rent-a-cab services is disallowed where the rented motor vehicle does not qualify as capital goods under the Cenvat Credit Rules. Rule 2(l)(B) excludes renting-of-motor-vehicle services from input credit unless the vehicle falls within specified capital-goods exceptions (use in manufacturing, captive power/pumping, provision of output services, goods transportation for output services, passenger transportation/renting/driving instruction). Vehicles used for directors' site visits do not meet these exceptions and therefore do not confer credit entitlement. (AI Summary)