Category - Liability of service tax

[Vijay Chitte]

"A" contract with "B" that, "B" is providing a service in the fields of arrangement of traveling facility to "A". For that "B" availed services from "C" (Other travel agency) for hiring a Car/Motor car for providing service to "A". Now "C" raise the bill to "B" Rs.10490/- in the following manner. Amount Rs.10490/- [10000 + 490 (4.9% Service tax) =10490] B" paid this amount to "C". And last, B raise this bill to A including of his margin of Rs.1000/- in the following manner. Gross Amount Rs.11000/- (10000+1000) + Rs. 1346/- (12.24% Service tax) = Rs.12346/- My query is: As per above activity is laible to service tax for “B” ? If yes, under which category of service?

AI Summary

Service tax liability applies to both the primary provider and the subcontracted car hire supplier, with CENVAT credit available if no exemption.
B engaged C to hire a motor car to provide travel-arrangement services to A; C charged service tax to B, and B charged A including B's margin and service tax. Both B and C fall under the same taxable category and are liable to service tax; if no exemption is claimed, CENVAT credit may be available subject to credit conditions.