Passenger transport exemption applies to non-air-conditioned contract carriage services carrying students and staff when notification conditions are satisfied.

Transportation of students and staff by non-air-conditioned buses under a contract carriage arrangement qualifies for exemption under Serial No. 15(b) of Notification No. 12/2017-Central Tax (Rate) when the service is passenger transport and does not take the form of tourism, a conducted tour, charter, or hire. The Authority applied the contract carriage concept with reference to the Motor Vehicles Act, 1988, and held that the service agreement satisfied the exemption conditions on the facts presented. The service was therefore treated as exempt from GST, subject to continued fulfilment of the notification's requirements.

---

---

Issues: Whether transportation of students and staff by non-air-conditioned buses under a contract carriage arrangement falls within Serial No. 15(b) of Notification No. 12/2017-Central Tax (Rate) and is therefore exempt from GST.

Analysis: The service agreement showed that the applicant was to provide non-air-conditioned vehicles for carrying students and staff under a contract carriage arrangement. The relevant exemption applies to transport of passengers by non-air-conditioned contract carriage other than radio taxi, where the activity is transportation of passengers and is not in the nature of tourism, conducted tour, charter or hire. The definition of contract carriage was also considered with reference to the Motor Vehicles Act, 1988. On the facts placed before the Authority, the service satisfied the conditions of the exemption entry.

Conclusion: The service is exempt from GST under Serial No. 15(b) of Notification No. 12/2017-Central Tax (Rate), subject to fulfilment of the conditions in that notification, and the answer is in favour of the assessee.

Ratio Decidendi: A non-air-conditioned contract carriage used for transportation of passengers, including students and staff, qualifies for exemption under the specified notification when the service falls within the exact terms of the exemption entry and its conditions are satisfied.

---