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2019 (2) TMI 1081 - AAR - GSTInput tax credit - GST charged by the Contractor for hiring of buses for transportation of employees - GST charged by the Contractor for hiring of cars for transportation of employees - restriction on ‘Rent a Cab’ service specified in Section 17(5)(b)(iii) - Held that:- The phrase “rent-a-cab” has not been defined in the CGST/HGST 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. Where any commercial vehicle is hired for transportation 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 contentions of the applicant that hiring of buses which can carry large number of passengers would not qualify under “rent-a-cab” is found to be untenable and the activitiy of the contractor in the instant case, providing buses or cars on hire to the applicant, is specifically covered under the meaning of “rent-a-cab”, which makes the impugned supply as ineligible for ITC in terms of Section 17(5) of the CGST/HGST Act, 2017. It clearly stands established that the services of the Contractor for hiring of buses/cars for transportation of employees qualify as “rent-a-cab” services. Further, it is also observed that nothing has been brought on record to suggest that the impugned service is not a service which is obligatory for an employer to provide to its employees under any law for the time being in force; or that such inward supply of services is being is used by the applicant for making an outward taxable supply of the same category of services or as part of a taxable composite or mixed supply. The applicant is not eligible for input tax credit of GST charged by the Contractor for hiring of buses/cars for transportation of employees.
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