TaxTMI 
TaxTMI 
Please update the details of reverse charge applicable on Cab Hiring Services. Is there any critiria of small cab (taxi) / big cab (buses) for taxability.
reverse charge rent a cab
25 Sep 2012 
2 Replies 
10518 Views Asked by
Reverse charge on cab hiring shifts tax liability to corporate receivers when providers are individuals or firms not in similar business.
Reverse charge applies to renting/hiring of motor vehicles when services are received from Individuals, HUFs, partnerships or AOPs and the receiver is a registered body corporate not in the same line of business. No distinction exists between small cabs and larger passenger vehicles. If tax is on the non abated value a partial reverse charge arises and the receiver pays a portion; if tax is on the abated value (provider has not availed cenvat credit) the receiver must pay the full tax. Otherwise, the provider pays the tax subject to taxability. (AI Summary)
Reverse charge applies to renting/hiring of motor vehicles when services are received from Individuals, HUFs, partnerships or AOPs and the receiver is a registered body corporate not in the same line of business. No distinction exists between small cabs and larger passenger vehicles. If tax is on the non abated value a partial reverse charge arises and the receiver pays a portion; if tax is on the abated value (provider has not availed cenvat credit) the receiver must pay the full tax. Otherwise, the provider pays the tax subject to taxability. (AI Summary)