Renting/leasing motor vehicle

This query is : Resolved

Madhurima Darisi (Querist)
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25 March 2013 I have a doubt regarding service tax and w.r.t to renting of motor vehicle

X pvt. ltd. is engaged in the business of leasing motor vehicles (cars basically). The lease agreements are primarily in the nature of operating lease. However X pvt ltd contends that since the vehicles are being given on lease, the same are not taxable under the "rent a cab" profile defined by service tax and hence no service tax is payable. Is the contention of X pvt ltd correct? If it is correct, then does such lease of moveable property become taxable under any other provision???

Link giving details of rent a cab service:

https://www.servicetax.gov.in/st-profiles/rentcab.pdf

Madhurima Darisi

Madhurima Darisi (Querist)
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26 March 2013 Please help me out..

Madhurima Darisi

Madhurima Darisi (Querist)
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26 March 2013 Please help me out.

Dayal

Dayal (Expert)
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12 September 2013 X Pvt. Ltd has parted with the right of possession and effective control in favour of the user because the user will having unchecked – unhindered possession of the Vehicle.
So the above transaction would NOT be liable to service tax.

The transaction involves transfer of right to use , the possession and effective control over such vehicle has been transferred with permission to use the vehicle.
The user is free to use in any manner as he likes.

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