Renting/leasing motor vehicle

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This query is : Resolved

Madhurima Darisi (Querist)

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)

26 March 2013 Please help me out..

Madhurima Darisi

Madhurima Darisi (Querist)

26 March 2013 Please help me out.

Dayal

Dayal (Expert)

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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