Rent-a-cab service includes cabs supplied for use for consideration, even where the operator retains control over vehicles.

Vehicles supplied to customers on a monthly basis with drivers retained under the assessee's control were treated as rent-a-cab service because the taxable entry was construed broadly to cover any service connected with renting of cabs. The amended definition extended the levy to persons engaged in the business of renting cabs, and the distinction between hiring and renting did not exclude the arrangement from tax where cabs were supplied for use for consideration. The service was therefore held taxable, and the demand and confirmation of service tax were sustained.

---

---

Issues: Whether the vehicles provided by the assessee to customers on monthly basis with drivers retained under the assessee's control amounted to rent-a-cab service and attracted service tax.

Analysis: The statutory definition of taxable service covered service provided by a rent-a-cab scheme operator in relation to renting of a cab. The expression "in relation to" was construed broadly to include services having direct or indirect connection with the specified service. The amended definition enlarged the scope of rent-a-cab scheme operator to include any person engaged in the business of renting of cabs, and the definition of cab covered motor cabs and maxi cabs. The distinction sought to be drawn between hiring and renting was rejected, as the nature of the arrangement showed that the assessee was providing cabs for use against consideration and the service remained within the tax net notwithstanding retention of control over the vehicles or the presence of drivers.

Conclusion: The activity was held to be rent-a-cab service and therefore taxable; the issue was decided against the assessee and in favour of Revenue.

Final Conclusion: The demand and confirmation of service tax were sustained, and the appeal failed.

Ratio Decidendi: For service tax purposes, a person engaged in supplying cabs for use for consideration falls within rent-a-cab service where the arrangement is connected with renting of cabs, and the mere characterization of the arrangement as hiring or retention of control over the vehicle does not take it outside the taxable entry.

---