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TMI Blog2018 (1) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... able in common parlance. Ordinarily, in common usage, there is hardly any distinction between 'renting' or 'hiring' and both the terms are usually used as synonym. The appellant indulges in providing service under a rent-a-cab scheme in relation to a cab and therefore irrespective of whether he retains possession and control of the vehicle or passes it to the consumer, the service so rendered by him would fall within the taxable service as defined under Section 65 (105) (o) of the Act and is chargeable to tax under Section 66 of the Act. The “rent-a-cab scheme” 1989 formulated by the Central Government in exercise of powers under Section 75 of the Motor Vehicles Act, 1988 providing for obtaining a licence by the operator of the scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n mileage in a month, the appellant would charge additional amount on per kilometer basis, if the vehicle is used beyond the minimum prescribed mileage. The bare reading of the various terms and conditions of the said agreement reveals that the control of vehicle remains with the appellant though it is used by the GAIL and that all the responsibilities and liabilities in connection with the use of the said vehicle would be that of the appellant. The appellant received a show cause cum demand notice as to why an amount of ₹ 5,12,040/- as service tax at the rate of 5% may not be charged and realized from him for renting the vehicles to the GAIL for the period 1.4.2000 to 31.3.2000. The appellant pleaded that he is not renting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging Section 66 of the Finance Act. The relevant provisions of the Finance Act are reproduced herein below:- Definitions. 65. In this Chapter, unless the content otherwise requires.- ............... ................ 105 taxable service means any service provided or to be provided; .. ............. ............... (o) to any person, by a rent-a-cab scheme operator in relation to the renting of a cab; Section 66 of the Act is the charging Section and it at the relevant time provided that there shall be levied tax referred to as service tax at a particular rate of taxable service referred to inter-alia in Sub-clause (o) of Clause 105 of Section 65 and collected in such manner as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has freedom to use the vehicle as pleases to him which undoubtedly implies that he must have possession and control over the vehicle which is not the case of simple hiring. Thus, where the possession and control does not passes to the hirer, the services would not be that of renting-a-cab but hiring and beyond the tax net of the Act. The Court in so ruling makes a distinction between renting of cabs and hiring of cabs. The question before us is whether such a distinction in the light of the above provisions is necessary for deciding the taxibility of the above service. A plain and simple reading of the relevant provisions would reveal that what is sought to be taxed under the Act is the service provided by a person under a rent-a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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