This case relates to the classification of services provided by ...

Buses hired out for 24/7 transportation services, not rent-a-cab as ownership/possession not transferred.

Case Laws     Service Tax

September 5, 2024

This case relates to the classification of services provided by the appellant, who hired out two 45-seater buses to ONGC for transportation purposes in Assam and parts of the North-Eastern Region. The key points are: The appellant retained ownership and possession of the vehicles during the contract period, and the vehicles were provided for 24/12 hour duty with payments based on kilometer, duration, and mileage. The Tribunal held that the service rendered was transportation and not rent-a-cab service, as in rent-a-cab service, ownership and possession are temporarily transferred to the hirer, which was not the case here. The Tribunal relied on precedents and concluded that the demand for service tax under the 'rent-a-cab service' category was unsustainable, and consequently, the interest and penalty demands were also set aside. The appeal was allowed.

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