Ruling: GST credit denied for rent-a-cab service; distinction made between passenger transport & vehicle rental.

The ruling determined that GST paid on motor vehicles for rent-a-cab service is not eligible for credit under section 17(5)(b)(i) of the GST Act. The decision was based on the analysis of pre and post-amendment provisions, distinguishing between passenger transportation service and renting of motor vehicles. The Applicant's service was categorized as renting a motor vehicle falling under SAC 9966, making GST credit inadmissible. The ruling stands unless invalidated under relevant provisions.

---

---

Issues:
1. Admissibility of the application

Admissibility of the application:
The Applicant sought a ruling on the admissibility of input tax credit paid on the purchase of motor vehicles for supplying rent-a-cab service. The concerned officer from the Revenue did not object to the admissibility of the application, stating that the question raised was not pending or decided in any GST Act proceedings. The application was admitted under section 97(2)(a) & (d) of the GST Act.

Submission of the Applicant:
The Applicant argued that credit of input tax paid on motor vehicles for rent-a-cab service should be admissible under section 17(5)(a)(B) of the GST Act, as the service is associated with passenger transportation. Invoices provided showed charges based on distance travelled.

Submission of the Revenue:
The Revenue officer noted that post-amendment, input tax credit for motor vehicles used in rent-a-cab service should be examined under section 17(5)(a)(B) of the GST Act. Renting a cab is solely for passenger transportation, making the Applicant eligible for input tax credit.

Observations and findings of the Bench:
Pre-amendment, credit for GST paid on inputs for rent-a-cab service was restricted. Post-amendment, input tax credit eligibility for motor vehicles used in rent-a-cab service is under section 17(5)(a)(B) of the GST Act. The Bench analyzed the nature of passenger transportation service versus renting of motor vehicles, concluding that the Applicant's service falls under SAC 9966 as renting a motor vehicle, making GST credit inadmissible under section 17(5)(b)(i) of the GST Act.

Ruling:
The ruling stated that GST paid on motor vehicles for supplying rent-a-cab service is not admissible for credit under section 17(5)(b)(i) of the GST Act. The ruling remains valid unless declared void under relevant provisions.

This detailed judgment analyzed the admissibility of input tax credit for motor vehicles used in rent-a-cab service, considering pre and post-amendment provisions of the GST Act and distinguishing between passenger transportation service and renting of motor vehicles to determine credit eligibility.

---