Renting of Motor Vehicle for transportation of passengers and goods - Service Tax Practice Manual / Ready Reckoner - Service Tax

Chapter 22 Renting of Motor Vehicle for transportation of passengers and goods (w.e.f. 1st July, 2012) Scope of Exempt Service Notification no. 25/2012 dated 20.06.2012 22. Services by way of giving on hire- ( a ) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or ( b ) to a goods transport agency, a means of transportation of goods Meanings and Definitions: state transport undertaking has the meaning assigned to it in clause (42) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988) goods means every kind of movable property other than actionable claim and money; and includes securities, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale; goods transport agency means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called; Clarification by the Board ( Taxation Guide Guidance Note 7 Exemptions dated 20.06.2012) 7.11.5 Is giving of a bus on hire to any person liable to tax? Giving on hire a bus to a state transport undertaking is exempt from service tax. If the bus is given on hire to a person other than a state transport undertaking, it will be taxed. 7.11.6 I have a bus with a contract permit and operating the bus on a route. The passengers embark or disembark from the bus at any place falling on the route and pay separate fares either for the whole or for the stages of journey. Am I required to pay tax? No. However, transport of passengers in a contract carriage for the transportation of passengers, for tourism, conducted tour, charter or hire is taxable.