Vehicle Hire Charges

[Sanjeev Sharma]

M/S XYZ have given 2 BUSES on agreed monthly rent to M/S ABC and all the running and maintenance cost are borne by the M/S ABC . Vehicles are driven by the drivers of M/S ABC. Tourist permit to run these buses are also in the name of M/S ABC.Is M/S XYZ who have given just their buses on rent are liable for service tax under rent a Cab

AI Summary

Debate Over Service Tax on Bus Rental: Is M/S XYZ Liable Under 'Supply of Tangible Goods' or VAT? M/S XYZ rented two buses to M/S ABC, with M/S ABC responsible for all running and maintenance costs, and the buses operated under M/S ABC's tourist permit. The question raised was whether M/S XYZ is liable for service tax under 'rent a cab.' Respondents agreed that the transaction does not fall under 'rent a cab' services. It might be subject to service tax under 'supply of tangible goods' unless taxable under VAT. One respondent emphasized that the transaction appears to fall under VAT, as M/S XYZ transferred possession and control to M/S ABC, and advised reviewing the agreement carefully.