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TMI Blog2021 (8) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas toll tax, etc will be paid by RIPL. Thus while the ownership of the buses lies with the applicant, the buses shall be operated strictly as per the instructions of RIPL. Therefore in the subject case, there is a clear transfer of right to use the buses by way of effective control as is seen from the fact that the buses are plying strictly as per RIPL s instructions. In the case of transportation of passengers, the recipient of service would be the passenger whereas in the case of renting of any motor vehicle, like buses in the subject case, the recipient would not be the passenger. In the subject case, the consideration for supply of service is charged from RIPL and not the passenger. Therefore in the subject case it is clear that the recipient is RIPL. Hence, there are no hesitation in holding that the subject activity, amounts to renting of motor vehicle and shall qualify as a taxable activity under the provisions of the GST Laws. Since the subject activity is not transportation of passengers the provisions of Notification No. 12/2017-CT (R) dated 28.06.2017 are not applicable in the subject case - All activities of Renting of any motor vehicle/transport vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NON AC Buses for transportation of their staff under contract carriage. As I am supplying NON AC Buses, whether GST is applicable for the same contract and applicability of SI No. 15 Heading 9964 of Notification No. 12/2017, dated: 28/06/2017 We are providing transportation of passengers excluding tourism, conducted tour, charter or hire of NON Air Conditioned Buses under a contract carriage with our customer. Whether GST is applicable on this service? B. Statement containing the Applicant s interpretation of law and /or facts 2.3 S. No. 15 (b) of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 is reproduced as under: S.No. Chapter Heading Description of Services Rate% Condition (1) (2) (3) (4) (5) 15 9964 Transport of passengers, with or without accompanied belongings, by - (b) Non-air conditioned contract carriage other than radio taxi, for transportation of passengers, excluding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime to time. (3) If a hirer so desires, he may engage a person possessing a valid driving license to drive the vehicle so hired during the period of the hire agreement. 2.5.5 A license holder may hire his vehicle for any person for his own use and the same will be regulated as per The Rent A Cab Scheme, 1989. The scheme gives the sense of hiring of a motor cab to a person for own use. Hire can be explained in the terms of the scheme that hiring of a motor cab by a license holder to any person for own use. In other words, the person can use the motor cab for own use only. Here, hire means to get the vehicle to own use therefore the person getting the vehicle will have effective control over the motor cab. Effectively, it is not simple hiring. In fact it is a right to use over the motor cab with effective control. Such hiring was neither taxable as services under the Finance Act, 1994 nor it is taxable as service under the CGST Act. In fact it was taxable as goods under the state VAT and similarly, it is taxable in the same category of the goods under GST. Means such hiring will be taxable with the GST rates of the motor under the GST Act. Conclusion: Transportation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distance; or (b) from one point to another, and in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey, and includes (i) a maxicab; and (ii) a motorcab notwithstanding the separate fares are charged for its passengers; From the plain reading of SL no 15 heading 9964 of above Notification, exemption of taxes is available only on transportation of passengers by air in sub entry (a) and on Stage carriage as per sub entry (c). (Where as stage carriage is defined as per Section 2(40) of the Motor Vehicles Act, 1988 as : Stage carriage means a motor vehicle constructed or adapted to carry more than six passengers excluding the driver for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey : ) Therefore these two subentries does not apply in this supply. And Subentry (b) is about non-air-conditioned contact carriage other than radio taxi for transportation of passengers but excluded Tourism, Conducted tour, charter or or hire . In the present case. As per copy of Service Order dated 01.07.2019 acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed As in the present case ruling is sought only on applicability of notification No 12/2017 dated 28.06.2017, the same shall not apply to the supply in question. The point which merits examination here is that whether the impugned services are covered by the definition of rent-a-cab . In this regard, it is observed that the phrase rent a-cab has not been defined in the CGST/SGST Act, 2017. In situations where statutory meaning of any term/phrase has not been provided words, entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or according to their popular meaning. Resort to rigid interpretation in terms of scientific and technical meanings should be avoided in such circumstances, as has been held by the Hon ble High Court of Allahabad in the case of Godrej Consumer Products Limited Vs. Commissioner of Commercial Tax [2018 (13) G.S.T.L. 135 (All.)] . Hence, we first proceed to examine as to what is rent-a-cab. 11. As per information available on website https://en.wikipedia.org/wiki/Cab, Cab means Cab or CAB may refer to: Transport [edit] Cab (locomotive), the driving compartment of a locomotiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortation of passengers, it would be squarely covered by the phrase rent-a-cab . In other words, any person who provides motor vehicle designed to carry passengers , on rent, would be included. This also implies that it includes renting of motor cars, motor cabs, maxi cabs, mini buses, buses and all other motor vehicles which are designed to carry passengers, irrespective of their capacity to carry passengers. The activity of the contractor in the instant case, providing buses on hire to the M/s. Ratan India Power Ltd, is specifically covered under the meaning of rent-a-cab , 15. In view of above, it clearly stands established that the services of the applicant for hiring of buses for transportation of employees qualify as rent-a-cab services. Therefore in view of above rulings and facts the Service provided by the applicant is not exempted under Notification No. 12/2017 dated 28.06.2017 as this Service does not fall under non-air-conditioned contract carriage category. The service provided is hire service or rent a cab Service, Therefore serial no. 15 of the exemption notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 does not exempt it from GST, as the hire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 5.3, the contract may be extended subject to performance of the contractor i.e. the applicant under mutual consent of both the parties. (6) The supplier, i.e. the applicant shall ensure all the compliance related to GST for the supplies or services rendered including Tax Amount. 5.4 We find that in the instant case, the applicant has an agreement with RIPL for supplying Non-AC buses to transport staff of RIPL and the buses are owned by the applicant. Further, the applicant also incurs expenses on fuel and maintenance of the buses and for all these services provided by the applicant, they are paid fixed hire cost plus fixed fuel cost at predetermined rates of fuel plus mileage. 5.5 We also find that it is RIPL which controls the deployment of the buses. A perusal of the agreement reveals that the applicant shall deploy the buses (already inspected by RIPL) or as per instructions of the Admn. Dept. of RIPL. Thus the applicant cannot run the buses on their own because the overall control of the buses is with RIPL. Further, as per the agreement, Insurance Charges, etc., will be paid by the applicant whereas toll tax, etc will be paid by RIPL. Thus while the ownership of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is engaged under a contract, whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such vehicle or any person authorised by him in this behalf on a fixed or an agreed rate or sum,- (a) on a time basis, whether or not with reference to any route or distance; or (b) from one point to another, and in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey, and includes, (i) a maxicab; and (ii) a motorcab notwithstanding the separate fares are charged for its passengers; 5.7.2 Thus, the essential ingredient of a contract carriage is that it plies under a contract for a fixed set of passengers, and does not allow any other passenger to board or alight from the carriage at will. A contract carriage canies passengers as a group and cannot pick up passengers en-route. 5.7.3 Since the rent-a-cab has not been defined under GST Act, we need to analyse the same word taking the help of Motor Vehicle Act, 1988. Dictionary meaning of Rent a cab is Taxi motor vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 11/2017-CT (Rate) dated 28.06.2017 amended by Notification No. 31/2017-CT (Rate) dated 13.10.2017 is as under:- Sl.No. Chapter, Section or Heading Description of Service Rate (percent) Condition 10. Heading 9966 (Rental services of transport vehicles ( (i) Renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle) has not been taken. [Please refer to Explanation no. (iv)] Or 6 - 5.8.2 The subject case is clearly covered by Entry Sr. No. 10 of Notification No. 11/2017 - CT (Rate) dated 28.06.2017 in as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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