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| Q.1 |
Who is a "Rent a cab
scheme operator"? |
| Ans. |
"Rent a cab scheme operator"
is a person who is engaged in the business of renting of cabs.
The new definition of rent a cab scheme operator introduced
in the Finance Act, 1998 , is effective from 16th
October, 1998. This definition is wider in scope than the earlier
definition which only included a person who was the holder of
a licence under the Rent-a-Cab-Scheme, 1989 framed by the Central
Government under the Motor Vehicles Act, 1988 as a rent-a-cab-scheme
operator. Under the Rent-a-Cab-Scheme, 1989 framed under the
Motor Vehicles Act, 1988, a licence is granted only in case
a person has a minimum of 50 cabs. This meant that a person
who had less number, say 5 or 10 cabs and was engaged in the
business of car rental, was not liable to pay service tax on
the services of renting of cabs. Consequent upon the revised
definition, such persons who are engaged in the business of
renting of cabs, even if not covered under the Rent a Cab Scheme,
1989, framed under the Motor Vehicles Act, 1988, will also be
required to pay service tax on the services of renting of cabs
irrespective of number of cabs rented out by them. |
| Q.2 |
What is the taxable
service in case of Rent- a- cab- scheme? |
| Ans. |
The taxable service
rendered by a Rent a cab scheme operator means any service provided
to any person, by a rent a cab scheme operator in relation to
the renting of a cab. |
| Q.3 |
What is the value
of service in case of Rent a cab scheme? |
| Ans. |
The value of taxable
service in relation to the service provided by a Rent a cab
scheme operator to any person, is the gross amount charged by
such operator from such person for services in relation to the
renting of a cab and includes such rental.
Any other charges billed to the customer such as processing
charges, administrative fees, charges for providing extra accessories
or providing other value added services such as a provision
of driver etc. shall also be includible in the gross amount
chargeable to Service Tax. However, Service Tax will not be
payable in cases where a bill is raised on a Rent a Cab Scheme
operator, by another rent-a-cab scheme operator who has sub-let
the motor cab to the latter operator provided the principal
operator pays Service Tax on the amount billed to his client
for renting out the motor cab so obtained by him. |
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