TMI Blog2019 (6) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... what distance the cab travels in a particular month. The additional amount has to be paid if the cab is retained for extra hours or requisitioned on holidays. To cover the cost of fuel, the distance travelled needs to be brought into play, but only if it crosses a certain threshold. The nature of the service the Applicant provides is classifiable under SAC 9966 as renting of a motor vehicle. The credit of GST paid on the [inward supply] of motor vehicles for the supply of the Applicant s service is not admissible in terms of section [17(5)(a)] of the GST Act. - WBAAR 09 of 2019 Order Number 08/WBAAR/2019-20 - - - Dated:- 25-6-2019 - MR SYDNEY D SILVA, AND MR PARTHASARATHI MEMBER Applicant s representative heard: Sambit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Admissibility of the application 1.1 The Applicant, stated to be supplying cabs on a rental basis, seeks a ruling on whether a credit is admissible of the input tax paid on the purchase of motor vehicles for the supply of the above service. 1.2 The question is admissible for advance ruling under section 97(2)(a) (d) of the GST Act. The concerned officer from the Revenue submits that question raised in the application is not pending or decided in any proceedings of the GST Act. As such, he does not object to the admissibility of the application. The application is, therefore, admitted. 2. Submission of the Applicant 2.1 The applicant submits that she supplies rent-a-cab service, as defined in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of the GST Act did not allow input tax credit on supply of rent-a-cab service, except under certain specific conditions. Post-amendment, effective from 01/02/2019, the restriction continues under section 17(5)(b)(i) of the Act on renting and hiring of motor vehicles. A registered taxpayer cannot, therefore, claim the input tax credit on the GST paid for hiring motor vehicles. The Applicant, however, is a supplier of rent-a-cab service. Section 17(5) of the Act does not restrict the supplier of such services from claiming the input tax credit on her inward supplies except as provided under section 17(5)(a) of the Act.] 4.2 Section 17(5)(a) of the Act provides that input tax credit shall not be available on inward supply of motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rate) dated 28/06/2017 (corresponding State Notification No. 1135 - FT dated 28/06/2017), as amended from time to time (hereinafter collectively called the Rate Notification). As obvious from reference to the accompanied belongings, the recipient of the service is a passenger travelling from one place to another. He may have varying degrees of control over the carriage, providing him with a certain measure of independence in choosing the destination and travel time, depending upon the nature of the contract, explicit or implied. But the supply remains that of transportation of the recipient as a passenger, and the consideration is paid for the distance travelled. 4.4 Renting of any motor vehicle, however, is classified under SAC 99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In passenger transportation service (SAC 9964) the recipient of the service is a passenger, and he pays the consideration for the distance travelled, whatever be the degree of control he enjoys over the vehicle. In renting or hiring of a motor vehicle (SAC 9966), the recipient is provided with the right to use the vehicle over a specified duration, whether he is a passenger or not. Distance travelled is taken into consideration to recover the cost of fuel. But travelling a certain distance is not the essence of the service. 4.7 Rent-a-cab is not defined in the GST Act. Nature of the Applicant s service is, therefore, derived from what is stated in the Application and what can be ascertained from the invoices. The Applicant provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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