service tax rent a cab, Service Tax

[Madhavan iyengar]

As per service tax law is a 40 seater bus covered under rent a cab and is it eligible for abatement and is service tax to be discharged on rcm basis

Posts / Replies

[KASTURI SETHI]

Section 65(20) - “Cab” means -

(i) a motor cab, or

(ii) a maxi cab, or

(iii) any motor vehicle constructed or adapted to carry more than twelve passengers, excluding the driver, for hire or reward :

Provided that the maxi cab referred to in sub-clause (ii) or motor vehicle referred to in sub-clause (iii) which is rented for use by an educational body imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre, shall not be included within the meaning of cab.

As per above definition, bus is covered under (iii) above as rent-a-cab. This service falls under RCM under Notification no.30/12-ST and abatement is also admissible.

In GST regime, situation is different.

 

[Madhavan iyengar]

sir with reference to sec 65(20) does this hold good post 2012 after negative list regime

since department in one case is asking to pay service tax on full value for bus hire they are stating that abatement is not applicable . and we cant take shelter under rent a cab as sec 65(20) is no longer applicable

kindly advise

[KASTURI SETHI]

Definitions of services under Section 65 of the Finance Act, 1994 were omitted with effect from 1.7.12 but these are relevant to identify nature of service/activity. Board issued circular and allowed to use accounting codes of services which were in force prior to 1.7.12. These were statistically valid and relevant. One can take shelter of legal dictionary or case law.

 

[DR.MARIAPPAN GOVINDARAJAN]

Sethi Sir,

You still remember the provisions of Service tax. Great sir.

[KASTURI SETHI]

Dear Sir,

Thanks a lot for your compliments.