Look at the mystery created or word changed in the service tax under the Finance Act,1994. How frequently the word Rent a Cab or Rent a Vehicle has been changed frequently over the time and purpose behind is not very obvious or apparent . This leads to confusion and increase litigation. Instead of making law simplier, it is being made more complicated and confusing .

To make it more rational, one has to see it what it was before the negative list approached and after that. For the complete analysis, the term Rent a Cab and Motor Vehicle definition has to be looked as defined in Finance Act,1994 or otherwise.

WE HAVE REMOVED THE CONTENTS OF THE ARTICLE TO COMPLY WITH OUR POLICIES RELATED TO PUBLICATION OF ARTICLES

CHECK RELEVANT ARTICLE ON THE SUBJECT AT THE BELOW LINK :-

Service Tax on Rent-A-Cab Service – A Guide

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One response to “Rent a Cab or Motor Vehicle Unfolding mystery of reverse charge or abatement”

  1. H L DAMA says:

    Dear Tax Experts,
    we are custom house Agent and Providing our service to our Valuable Clients.
    Some time we are hiring Cars from Car owners.
    Car owners giving their cars for providing Service to our Clients.
    Car owners they are billing us in following way as Car Hire Charges.
    In bill they are taking abatement @60%and balance 40% they are charging us S.T and SBC Car owners paying S.T. .
    Can we claim S.Tax and SBC as our input services like Telephone, etc
    Pls quide us.
    Thanks
    H L Dama.

    email-harjidama@gmail.com

  2. Saravanan says:

    Dear Tax Experts

    What is the current Service tax rate on Rent-A Cab. We are automotive component manufacturer.

    Please tell clearly.

  3. Saravanan says:

    Dear Tax Experts

    What is the current service rate on Rent-A Car.

    Please tell clearly.

  4. CA SHYAM NAGARSEKAR says:

    A RENT-A-CAB SCHEME OPERATOR (PROVIDER “A”) AVAILS ABATEMENT AND CHARGES SERVICE TAX @ NIL OR 5.6 % DEPENDING UPON WHETHER HIS CUSTOMER IS A CORPORATE (UNDER REVERSE CHARGE MECHANISM) OR A NON CORPORATE CUSTOMER.

    AT TIMES, HE PROCURES VEHICLES FROM OTHER RENT-A-CAB SCHEME OPERATOR (PROVIDER “B”) WHO CHARGE SERVICE TAX @ 5.6 % IN HIS INVOICES.

    WHETHER PROVIDER “A” IS ENTITLED TO CENVAT CREDIT ON THE SERVICE TAX CHARGED BY PROVIDER “B”

    I. WHEN PROVIDER “A” HAS PROVIDED SERVICE TO HIS CORPORATE CUSTOMER (WHERE HE DOES NOT CHARGE SERVICE TAX UNDER REVERSE CHARGE MECHANISM;

    II.WHEN PROVIDER “A” HAS PROVIDED SERVICE TO HIS NON-CORPORATE CUSTOMERS (WHERE HE CHARGES SERVICE TAX @ 5.6 %)

    THANKS AND REGARDS

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