Service tax on rent-a-cab services applies where vehicles are made available for use, regardless of whether the arrangement is called hiring or renting.

For service tax purposes, hiring and renting of cabs are not distinct where the statute taxes the service of making vehicles available for use. The court followed its earlier ruling on identical facts and held that the label used for the arrangement did not matter; the substance of the activity governed taxability. Continuous availability of the vehicle for use fell within the taxable rent-a-cab service, and the absence of transfer of legal possession did not take the service outside the tax net. The challenge to service tax liability therefore failed, and the Tribunal's order was upheld.

---

---

Issues: Whether the terms "rent" and "hire" are interchangeable for the purpose of fastening service tax liability on a rent-a-cab scheme operator under the Finance Act, 1994.

Analysis: The dispute turned on the nature of the service provided by the cab operator and whether it fell within the taxable category relating to rent-a-cab services. The Court followed its earlier decision on identical facts, which held that the Legislature had not drawn any distinction between hiring and renting of vehicles for levy of service tax. The reasoning accepted that the taxable service covered continuous activity of making vehicles available for use, whether described as hiring or renting, and that absence of transfer of legal possession did not take the service outside the tax net.

Conclusion: The question was answered in the affirmative in favour of the Revenue and against the assessee. The appeal was dismissed and the Tribunal's order was upheld.

Final Conclusion: Service tax was held leviable on the activity in question, and the assessee's challenge to the demand failed.

Ratio Decidendi: For service tax purposes, hiring and renting of cabs are not distinct categories where the statute taxes the service of making vehicles available for use; the substance of the activity, not the label used, governs taxability.

---