Rent a cab service and input taxcredit

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This query is : Resolved

RUSHI GSTM (Querist)

14 January 2018 DEAR EXPERT,

We are a Manufacturer Located in Pune. We are providing Bus Transport Facility to Our Employees for Daily Pick-up and drop from their respective locations.

We have made a contract with bus service provider for Bus Transport Facility and as per terms and conditions bus service provider has to bear the cost of fule. The buses are having capacity to transport the passengers of 17 Setter and 32 Setter including driver for 7 Locations. The Service provider is charging us 5% GST (CGST+SGST) on monthly service amount.

Now Question is that Whether we can claim the input tax credit of the Rent a Cab Service in GST ?

We are in confusion because in GST law the definition of Rent-a-cab is not given.If we go through the definition of Cab as per Motor Vehicle Act Cab means a vehicle having capacity to carry 6 passengers is a motor cab and maxicab means having capacity to carry upto 12 passengers.
Then for motor vehicle having capacity to transport more than 12 passengers is not a cab in other words bus which is having capacity to carry 17 to 32 passengers in not a Cab as per definition of Motor Vehicle Act.

But as per earlier law in Service Tax Bus is treated as a cab in other words cab which is having capacity to carry more than 12 passengers is a Cab.

Now Question is that In GST Law the definition of Cab has not given shall we treat it as a Bus and avail the Input Tax benefit otherwise it become a Cost to Business or we need to avoid the ITC as per Section 17(5).

We are in confusition? Please advise in details

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Read more at: https://www.caclubindia.com/experts/ask_query.asp