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M/s J.P. Morgan Services India Private Ltd, Mumbai Versus Commissioner of Service Tax

2016 (1) TMI 25 - AUTHORITY FOR ADVANCE RULINGS

Levy of service tax on the proposed car lease scheme (of providing vehicles to employees) under Section 66B of the Finance Act, 1994 - applicant is an employer and the applicant is providing some service to its employees by giving an option to all such employees to avail of a car. - Held that:- it is making available a car for the use of the employees during the term of their employment for which it is charging only the car rent which the applicant is paying to the car leasing company from which .....

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s employment.

There can be no dispute that the service of "making available" a car to the employee is being rendered by the applicant. In this context, both the conditions are fulfilled which are conditions in clause (b) of Section 65B (44).

Whether the car given for official use, for personal use or use for both will not be making any difference. In view of the clear-cut language of Section 65B (44) (b), we answer the question accordingly. - Not liable to service tax. - .....

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The Advance Ruling is being sought with respect to the levy of service tax on the proposed car lease scheme (of providing vehicles to employees) under Section 66B of the Finance Act, 1994, i.e. whether the scheme proposed to be introduced by the Applicant would be regarded as a 'service' under the Finance Act, 1994 and thus, being subject to service tax." 2. The applicant floated the scheme moreover as an employment retainment programme. Under the scheme, the applicant was to provid .....

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mpany from whom they hire the car. 3. It is an admitted position that the service which is provided by the car leasing company to the applicant is being taxed under the regime of the service tax. There is no dispute over this. The question posed is as to whether the amount which the applicant charges to its employees for this use of the vehicles is subject to service tax. 4. In fact, there would be no necessity to consider this question if the amount is charged by the applicant to the employee i .....

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consideration, and includes a declared service, but shall not include a provision of service by an employee to the employer in the course of or in relation to his employment." 6. There can be no dispute that here the applicant is an employer and the applicant is providing some service to its employees by giving an option to all such employees to avail of a car. In that sense, it is making available a car for the use of the employees during the term of their employment for which it is charg .....

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