TMI BlogHiring of Motor VehiclesX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, As per service tax notification no. 30/2012 dt. 20/06/2012 Hiring of motor vehicles to carry passenger on abated value and non abated value under reverse charge machenism. What is the meaning of abated value and non abated value for calculation of service tax. Secondly we have hiring bus for our workers on some collection of Employees contribution and some payment made by compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. In this case, is company is liable for service tax under reverse charge. Thanks - Reply By R MUTHURAJ - The Reply = Dear Mr.Ram Sharma, (1) Let me explain the meaning of Abated Value and Non Abated Value. In the case Services of Transport of passenger have abatement of 60% Balance 40% only taxable. In the case Services of Transport of passenger have non - abatement then entire 100% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be taxable. Then what is the difference between these two? If the Service Provider wants to put Tax only for the balance 40%, then he CAN NOT TAKE CENVAT INPUT CREDIT as per the Cenvat Credit Rule, 2004 But if the Service Provider pays Tax on100%, then he CAN TAKE CENVAT INPUT CREDIT as per the Cenvat Credit Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 2004 (2) In respect of your second question, if the Transporter takes input credit (prefers for non-abatement) then he has to levy service tax on 60% Value and the Service receiver (the company) has to pay Service Tax on 40% Value . In case, if the Transporter DOES NOT takes input credit (prefers for abatement) then he will not charge service tax in his bill and the Service rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iver (the company) has to pay Service Tax on 100% Value with 40% . In both the cases, the government will get the same amount of service tax. I Trust this clarifies your doubts. - Reply By RAM SHARMA - The Reply = Sl.No. Description of a service Percentage of service tax payable by the person providing service Percentage of service tax payable by the person rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iving the service 7 (a) in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business (b) in respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non abated value to any person who is not engaged in the similar line of business Nil 60% 100 % 40% I would like to conclude as in Sr no. 7(a) carry passengers on abated value means(if service provider avail cenvat credit benefit) and in Sr. no. 7(b) carry passenger on non abated value means(if service provider not availed c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envat credit benefit) Secondly we have collected contribution from our employees for bus fare however we will be liable for service tax. Please advice. Thanks - Hiring of Motor Vehicles - Query Started By: - RAM SHARMA Dated:- 22-5-2013 Service Tax - Got 2 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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