rent a cab credit

[nirali pandya]

I am an employer and hiring cabs for transportation of employees. Am i eligible to take credit of such GST paid.

[CSSANJAY MALHOTRA]

ITC is not admissible as rent a Cab service is specified in negative list. Please refer section 17(5) of CGST act.

[JAIPRAKASH RUIA]

But is there any difference between hiring and renting.

[nirali pandya]

Sir, I am hiring services of cab as i am availing services whereas if i am giving my cabs on rent it will be renting of services of cabs Its just a difference of giving (in case of renting) and availing (in case of Hiring) .

[Ganeshan Kalyani]

Input tax credit is not eligible on rent a car service.

[JAIPRAKASH RUIA]

Restricted credit provisional are as under :

(iii) rent-a-cab, life insurance and health insurance except where ––

(A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or

(B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and

First it is not restricted if fall under provisio (A) & (B).

Second, the credit is restricted only for Rent a Cab, and Cab is not defined in GST acts but defined in Motor vehicle Act. There also word "maxi cab" and "motor cab" is used. So every service related to all kind of motor vehicle is not restricted here in my view. It has to be vetted carefully whether the service availed is really fall under Rent a Cab or not.

[KASTURI SETHI]

Pl. go through this case law.

2005 (186) E.L.T. 143 (Tri. - Mumbai) = 2005 (4) TMI 5 - CESTAT, MUMBAI

[Alkesh Jani]

Sir, I agree with the views of experts that ITC is not available. In short the services is for personal use and it is next to impossible for your to prove the nexus with furtherance of business.

[JAIPRAKASH RUIA]

Dear Sir,

I have high regards to the experts and continue to raise my arguments and discussions.

I would here like to produce the sethi sir,s post in which the honorable HC has considered the rent a cab activity as business expenditure.

"Tour operator" - for transportation of their employees to the residence and vice versa . High Court of Karnataka in the case of CCE v. Stanzen Toyotetsu India (P) Ltd. - 2011 (4) TMI 201 - KARNATAKA HIGH COURT has clearly held that these services are for transportation of employees and credit of tax paid is eligible as input service. Since the issue has already been settled, CENVAT credit of service tax paid on tour operator service is allowed.

Sethi sir,s post

AI Summary

Input tax credit on rent a cab services hinges on statutory exclusion and narrow exceptions for employer obligations and re supply.
Eligibility for input tax credit on cab services depends on the exclusion of "rent a cab" under section 17(5) and two exceptions: government notified obligatory employer services, and where the inward supply is used to make an outward taxable supply of the same category. Practitioners emphasise verifying whether the service genuinely falls within "rent a cab" and proving a business nexus; a precedent treating employee transportation as a creditable tour operator service under prior law is cited.