It's understood that your friend uses a car owned by someone else, for which the insurance premium is being paid by the owner. The premium includes a Service Tax of 12.36%. Am I correct? If yes, the answer is NO. Since the real owner of the car (as per the RC records) is your friend's owner, only the owner is entitled to avail the input credit of the Service Tax paid in the premium. This is because only the registered owner is the rightful assessee. However, let me know how Service Tax comes into the picture here. Do you mean Income Tax? If the query is about Income Tax, then a premium paid on a vehicle is not relevant to personal Income Tax. However, it may be considered for business income/expenses and deductions while computing Income Tax. Please make your query clearer to enable us to provide an appropriate opinion.