2016 (8) TMI 16 - HC - Service Tax

Rent a cab scheme - whertehr the terms rent and hire are interchangeable - Held that - this issue is now covered by the decision of this court in the case of Commissioner of Service Tax v. Vijay Travels 2015 (1) TMI 809 - GUJARAT HIGH COURT - the appeal deserves to be dismissed - Decided in favor of revenue.

Summary

Issues:
Interpretation of terms 'rent' and 'hire' for service tax under Finance Act, 1994.

Analysis:
The appellant challenged the Customs, Excise and Service Tax Appellate Tribunal's order regarding the payment of service tax for providing cab services. The High Court framed the substantial question of law regarding the interchangeability of the terms 'rent' and 'hire' under the Finance Act, 1994. The appellant contended that the Tribunal failed to consider their arguments properly, leading to the dismissal of the appeal.

The respondent cited a previous decision by the High Court that emphasized the legislative intent to tax services involving both hiring and renting of cabs. The Court held that there is no distinction between hiring and renting for the purpose of levying service tax. The Rent-a-Cab Scheme Operator was deemed liable for service tax, as the legislative framework did not differentiate between the two terms. The Court highlighted the definitions of 'rent' and 'hire' and concluded that the appellant was liable for service tax under the existing legal provisions.

Considering the precedent set by the previous decision, the High Court upheld the order of the Tribunal, ruling in favor of the revenue and against the appellant. The Court dismissed the appeal, emphasizing the uniform tax liability for services involving the rental or hiring of vehicles. The judgment clarified the legislative intent behind taxing services provided by Rent-a-Cab Scheme Operators and upheld the imposition of service tax based on the existing legal framework.

In conclusion, the High Court's judgment affirmed the liability of the appellant for service tax under the Finance Act, 1994, based on the interpretation of the terms 'rent' and 'hire' as interchangeable for the purpose of levying service tax. The decision provided clarity on the taxability of services related to renting or hiring vehicles, emphasizing the uniform application of tax laws in such cases.