2023 (10) TMI 738 - AT - Service Tax

Tribunal rules transportation services for educational institutions not taxable under rent-a-cab category; appeal allowed.

The Tribunal concluded that the transportation services provided by the appellant to the educational institution are not taxable under the rent-a-cab ... Levy of service tax - rent-a cab service - appellant had provided buses for transportation of students, facilities and staff to Vadodara Institute of Engineering, which is an educational institution - scope of cab. Appellant submits that the bus service was provided by the appellant for use by the educational body, therefore, this is not included within the meaning of cab. HELD THAT:- There is no dispute in the fact that for the purpose of transportation by bus the appellant had entered into a contract with the education institution namely Vadodara Institute of Engineering which is undisputedly an education institute - From the definition of rent – a – cab scheme operator service, the motor vehicle rented for use by an education institute shall not be included within a meaning of a cab, therefore, renting of bus for an educational institution is clearly excluded from the definition of ‘cab' for the purpose of levy of service tax under rent- a – cab scheme operator service. It is also found that as per the CBEC Letter F. No.137/70/2007- CX.4 dated 26.04.2008 that school running transport services for their students are not liable to payment of service tax under the category of tour operator. The activity is not taxable under rent – a – cab operator service - Appeal allowed. Issues:The issue in this case involves determining whether the transportation services provided by the appellant to an educational institution are liable for service tax under the category of rent-a-cab service.Summary:The appellant provided buses for transportation of students, facilities, and staff to an educational institution. The appellant charged bus fees as per the contract with the institution. The department claimed that the service is taxable under rent-a-cab service.The appellant argued that the bus service provided to the educational body does not fall under the definition of a cab and therefore should not be taxable. They cited CBEC's circular and a previous judgment to support their position.The Revenue supported the findings of the impugned order.The Tribunal examined the issue of whether transportation by bus for an educational institute is liable for service tax. They referred to the definition of a rent-a-cab operator and concluded that renting a bus for an educational institution is excluded from the definition of a cab for service tax purposes.Additionally, they referenced a CBEC circular stating that schools running transport services for students are not liable for service tax under the tour operator category. A previous judgment was also cited where the Tribunal ruled in favor of the appellant based on the interpretation of the definition of a cab under the Finance Act.Based on the discussion and supporting judgments, the Tribunal concluded that the activity is not taxable under the rent-a-cab operator service, setting aside the impugned order and allowing the appeals.The decision was pronounced in open court on 05.10.2023.