Goods and Services Tax – GST – By: – Sanjeev Singhal – Dated:- 21-2-2018 Last Replied Date:- 26-4-2018 – The Word Rent-a-Cab has not been defined in the CGST Act, 2017 . The Word has been used in CGST Act 2017 only once u/s 17(5). Paragraph mentioned is follows : Section -17(5) of the CGST Act,2017 says ; (iii) rent-a-cab, life insurance and health insurance except where- (A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or (B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and Here I am going to discuss the word Rent a cab as the word is used for denying the input credit . Means thereby , if any supplier of Goods or Services uses this service, it will not be allowed as Input Tax Credit. First of
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sub-clause (iii) which is rented for use by an educational body imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre, shall not be included within the meaning of cab. However, as per Notification No. 20/2012-ST dated 05-06-2012, the provisions of Section 65 shall not apply with effect from 01-07-2012. It means, in the Negative List regime, the definitions contained in Section 65 are no longer applicable for service provided or agreed to be provided on or after 01-07-2012. The new definitions are contained in section 65B of the Finance Act, 1994 which do not define Rent-A-Cab or any similar service. Therefore above definition is provided in section 65[20] was made redundant in post Negative list era of Service tax. Any person providing service of renting of motor vehicle designed to carry passengers , which is not covered under the negative list u/s 66D and also not exempted vide Notification No.25/2012-Service Tax, dated
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less than four wheels fitted with engine capacity of not exceeding thirty-five cubic centimeters; Radio taxi means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS). 'Stage Carriage' means a motor vehicle constructed or adopted to carry more than six passengers excluding the driver for hire or reward at separate fairs paid by or for individual passengers, either for the whole journey or for stages of the journey [section 2(40) of the Motor Vehicles Act, 1988]. Motor Cab Section 2(25) of Motor Vehicles Act, 1988 defines 'motor cab' as any motor vehicle constructed or adapted to carry not more than 6 passengers excluding driver, for hire or reward Section 2(7) of the Motor Vehicles Act defines a 'contract carriage' as follows : 'Contract carriage' means a motor vehicle which car
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p and cannot pick up passengers en-route. As per section 2(22) of Motor Vehicles Act, 1988 'maxi cab' means any motor vehicle constructed or adapted to carry more than 6 passengers, but not more than 12 passengers, excluding the driver, for hire or reward. These vehicles are more popularly known as vans, Innova, sumo etc After going through the above definitions in Motor Vehicle Act, it can be concluded that Rent-a-cab falls under the definition of motor cab which can not carry more than six passenger Though in case of Service Tax, all motor vehicle meant to carry passenger was covered in Rent-a-cab service . Conclusion; Therefore in my opinion , if any supplier of goods or services hires bus or any other motor vehicle carrying more than six passenger for their employees or otherwise , shall not fall under the definition of rent-a-cab u/s 17[5] and ITC will be allowed on this service which falls under the SAC – 9964. About the Author: Author is practicing chartered accountant
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