By Puloma Dalal, Jayesh Gogri, Mandar Telang, Chartered Accountants
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There is no fundamental distinction between hiring of a cab and renting of a cab for the levy of service tax.
Facts:
The Appellant provided motor cabs/maxi cabs (with drivers) to GAIL on monthly basis and entered into an agreement of monthly rates for specified vehicles subject to specified usage in kilometres on 24 hours basis, additional amount for excess usage, separate charges for night halts etc. Other expenses towards fuel, salary of drivers and maintenance of vehicles were the responsibility of service provider.
The department contended that the Appellant provided rent-a-cab service and demanded service tax on the same. The Appellant contended that the said activity amounted to merely “hiring of motor” vehicle and there was no ‘renting’ involved since the recipient of service had no domain or control over the vehicle and the vehicle was placed at his disposal only for temporary usage, for the duration, either in point of time or in point of distance. It was also contended that, the domain of vehicle was always with the operator i.e. Appellant who also bears the expenses and maintenance charges.
Held:
Relying upon the decision of the Hon. High Court in CCE vs. Kuldeep Singh Gill [2010] 27 STT 224, the Hon. Tribunal decided in favour of the revenue by holding that there was no fundamental normative distinction between “hiring of cab” and “renting of cab” and that the Appellant provided rent-cabservices to GAIL leviable to service tax.
