By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Whether providing vehicle on call basis amounts to renting of cab service?
Facts:
Revenue’s contention was that vehicle let out by Respondent to National Fertilizer Limited (NFL) during the period from October, 2001 to March, 2006 resulted in providing of rent-a-cab service. The fact that the vehicle was given to NFL, does not diminish the liability. According to the assessee, the vehicles were not altogether given on rental basis by the respondent to NFL but the service was of hiring of taxi as per Clause (3) of the contract with NFL which also reflected that service of taxi was provided under a scheduled rate contract without the taxi being in exclusive control of NFL.
Held:
The Tribunal observed that there was no condition of providing of vehicles on a term basis, but was on call basis i.e. one hour from booking time in regard to local travel and with suitable notice time for outside journey. Thus, it was evident that there was an arrangement of providing transport service without renting the vehicles. NFL paid the consideration as per the agreed rate schedule on transportation services provided. In the case of no call or no demand or no transportation provided to NFL, no consideration was demanded. Thus, it cannot be held that the respondent rented any cab to NFL and therefore, did not invite any service tax liability.
