Service Tax Rules for Renting Motorcabs: Key Changes Since 2012, Including CENVAT Credit Conditions and Fuel Cost Inclusion.
The service tax regulations for renting motorcabs, effective from July 1, 2012. Initially, the effective tax rate was set at 40% of the prescribed service tax under section 66B, with conditions on CENVAT credit usage. From October 1, 2014, additional conditions allowed partial CENVAT credit on input services, depending on the tax payment structure of the service provider. The definition of "renting" includes various forms of property use. An explanation added in 2016 clarified that the cost of fuel must be included in the service charges for availing abatement benefits.
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