Friday, 9 February 2018

HC : 'Renting' & 'hiring' of cabs liable to service tax; Transfer of control irrelevant


Renting of motor cab liable to service tax u/s 65(105)(o) r/w Section 66 of Finance Act, irrespective of whether operator retains possession and control of vehicle or passes it on to the customer; Rejects assessee’s stand that since control of cabs does not pass to customer, its business would not be covered under the term “Rent-a-cab scheme operator” chargeable to service tax; HC observes, a plain and simple reading of relevant provisions indicate that what is sought to be taxed under the Act is service provided by a person under a rent-a-cab scheme, whereby no distinction is made between ‘renting’ and ‘hiring’; Absent definition of said terms under Finance Act, meaning acceptable in common parlance must be assigned, states HC while observing that distinction carved out between 'renting' and 'hiring' of cab by Uttarakhand HC in case of Sachin Malhotra in view of Section 75 of Motor Vehicle Act, 1989 is not necessary for determining taxability of service; Further elucidates, “rent-a-cab scheme” formulated by Central Govt. providing for obtaining of license by scheme operator has nothing to do with the provisions relating to imposition / chargeability of service tax  : Allahabad HC

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