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Abeted and not abeted value in rent a cab service

Service Tax - Started By: - Swapneswar muduli - Dated:- 16-1-2016 Last Replied Date:- 25-1-2016 - Dear Sir,We are manufacturer and we availed the rent a cab service for carry our employees. ans few service providers are charge the service tax in the invoice on 50% of the invoice value. we paid rest service tax on 50% under RCM.And some service providers are not charges any service tax in invoice due to not they have not cross their thresh hold limit. In this case also we paid the service tax on .....

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service provider avails abatement, 100% (after abatement of 60% =40%) liability of service tax is to be discharged by service recipient.Recipient can take full credit of service tax paid .Full credit means (40% ST paid). No cenvat credit to service provider availing abatement. Abatement of 60% is admissible vide Notification No.26/12-ST dated 20.6.2012 as amended vide Notification No.No.8/14-ST dated 11.7.14.(ST is on 40% of value) If service provider does not avail abatement, ST is to be paid o .....

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alue means not availing abatement and abated value means availing abatement. No certificate or document is required from service provider to the effect whether he has availed abatement or not. Invoice of service provider is itself proof whether he has availed small scale exemption or not; whether he has availed abatement or not. Service recipient is responsible for his own liability. Service receiver has no concern with liability of service provider. - Reply By MARIAPPAN GOVINDARAJAN - The Reply .....

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by the recipient. However if he has crossed threshold then there comes an option for abatement and non abatement. If he has availed abatement then he will not charge service tax on invoice and same time he has to forego the input credit. in this case where he has opted for abatement will not known to the recipient as the recipient will assume that his turnover would not have crossed the basic limit and that is why he has not charged his portion of service tax. But recipient will not come to kno .....

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ice receiver subject to specific exemptions provided to specific service provider, if any.(Abatement is also a kind of exemption) As per Rule 4 A(1)(iv) he will show service tax payable, value of service provided on the invoice. Service Tax payable means payable by the Service Provider. As a precautionary measure, service provider may on his own or at the request of service receiver may specifically mention percentage of service tax to be paid by the service receiver. Even without exhibit of the .....

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r will not come to know. It is safe for both. Similarly, in Central Excise, SSI unit availing exemption mention such remarks on the body of the invoice. It is pertinent to point out that it is a practice that every small scale service provider availing exemption or a manufacturer availing SSI exemption gives progressive total of the value on the back of each invoice (date-wise) to keep the track of sale value/service value so that mistake may not crop up regarding crossing the exemption limit No .....

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have their own statutory obligation and their own independent method of valuation. I hope now picture is clear. - Reply By Ganeshan Kalyani - The Reply = Nicely explained by Kasturi Sir. Thanks. - Reply By Akash Deep - The Reply = Dear Mr.Swapneswar I noticed that as per your query some of the services providers are availing SSI exemption and you are paying tax on the invoices raised by such service provider on the 50% of the invoice value. what i understood from your query is that by paying tax .....

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ces which has been notified under section 68(2) read with rule 2(1)(d) of ST Rules, SSI exemption benefit shall not be available to such person. Moving further, if a person provided services which are notified under section 68(2) and services other than notified services, then he should claim SSI exemption only in respect of services other than notified services and should discharge tax liability in respect of notified services even tough aggregate value of such all the services is less than  .....

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from the above discussion one is very clear that as the services of renting of motor vehicle (motor vehicle also includes cab as per motor vehicle act) is a notified services so no SSI exemption is available to such service providers. in this situation your claim that some of the service provider are claiming SSI exemption does not seem proper. (i am assuming that such services providers are either individuals, HUF or partnership firms and you are an incorporated company). if services provider a .....

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ding. SSI exemption and tax liability under reverse charge does not go hand in hand. The movement you say that service providers are claiming SSI exemption, it is inherent in the statement that services under consideration are not notified services under section 68(2). if you say that service providers are rightly claiming SSI exemption, in that situation you are wrongly paying tax under reverse charge mechanism. Regards Akash Deep 9 - Reply By KASTURI SETHI - The Reply = Dear Sh.Akash Deep, You .....

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re are most of small small service provider's are there whoa re not charging the service tax on their invoice due to they don't cross the turnover limit of 10 lacs and taking the benefit of SSI Exemption.So in said above case the service providers are making mistake for taking the SSI Exemption ?My query is if the service providers are making mistake as we are a service receiver we are not accountable for their mistake ?Further can we take the benefit of abetted scheme as Cenvat not elig .....

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pneswar Muduli - Reply By KASTURI SETHI - The Reply = You are not accountable for mistake, if any, committed by the Service Provider. - Reply By Akash Deep - The Reply = Dear Swapneswar either wait for the article or if you want me to give advisory contact me on my number in in my profile. - Reply By Swapneswar muduli - The Reply = Thank you very much sir - Reply By Swapneswar muduli - The Reply = Dear Akash Deep Sir,You Mentioned mob no in your profile is .0987346312 but its 9 digit so so i una .....

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