Service Tax
Amendment to the Finance Act, 1994 (the Act) – New
inclusions and exclusions from the ambit of service tax Radio
taxis
Clause 39 of section 65B (Interpretations) of the Act has been
amended (which defines metered cab) to carve out the service
rendered by radio taxis (similar to call taxis). The reason being
the Government wants to impose service tax on the services rendered
by the radio taxis. Since metered cabs are statutorily exempted
from service tax under section 66D (which deals with exempted
services), the exclusion of radio taxi from the definition of
metered cab will lose the exemption under section 66D and thereby
making it liable to service tax.
However, the radio taxis can enjoy the same abatement as per
Notification No. 26/ 2012 ST which is available to 'Renting of
any motor vehicle designed to carry passengers'. The effect is
that only 25% of the consideration received by the radio cabs will
be liable to service tax provided no cenvat
