Rent-a-cab service tax applies to motor cab arrangements even where the operator retains possession and control of the vehicle.

A motor cab facility provided under a rent-a-cab arrangement was treated as a taxable service under the Finance Act. The court read "renting of a cab" in its ordinary and common parlance sense, holding that the statute did not draw a distinction between renting and hiring. It further held that the operator's possession or control of the vehicle was not decisive for service tax liability, because the levy depended on the tax statute rather than the licensing scheme under the Motor Vehicles Act. The service was therefore held taxable, and the question was answered in favour of the Revenue.

---

---

Issues: Whether the facility of motor cab provided under the agreement amounted to a taxable service as a service provided by a rent-a-cab scheme operator and was liable to service tax.

Analysis: The charging scheme under the Finance Act covered services provided by a rent-a-cab scheme operator in relation to renting of a cab. The expression was not confined by any statutory distinction between renting and hiring, and the words were used in their ordinary and common parlance sense. The nature of possession and control of the vehicle was therefore not decisive for bringing the service within the tax net. The rent-a-cab scheme under the Motor Vehicles Act regulated licensing of operators and did not control the levy of service tax under the Finance Act.

Conclusion: The service fell within the definition of taxable service and was chargeable to service tax; the question was answered in favour of the Revenue and against the assessee.

Final Conclusion: The appeal failed because the cab service provided under the agreement was held taxable under the service tax provisions.

Ratio Decidendi: A service of providing motor cabs under a rent-a-cab arrangement is taxable under the Finance Act even if the operator retains possession and control of the vehicle, since the statute does not draw a distinction between renting and hiring.

---