Page 167 - GSTL_26th March 2020_Vol 34_Part 4

2020 ] IN RE : YKK INDIA PVT. LTD. 677
the basis of distance travelled or time of usage to the Contrac-
tor. Thus the transportation services received by the Appel-
lant are akin to hire and not rent and therefore the restriction
on input tax credit in respect of ‘Rent a Cab’ is not applicable
on supply of transportation service to the Appellant. There-
fore, it is submitted that the activity undertaken by the Con-
tractors of providing the buses and cars for transportation of
the employees are not in the nature of rent but fall under the
scope of hire and cannot be held to be covered by Section
17(5) of the Act.
(k) The Ld. Advance Ruling Authority failed to consider that the
MV Act envisages different permits for hire a cab service and
rent a cab service. In this regard, reference is made to Section
2(28) and Section 74 of the MV Act, which is extracted below :
Section 2(27). Contract carriage. -
“Contract carriage means a motor vehicle which carries a pas-
senger or passengers for hire or reward, and is engaged under a
contract, whether express or implied, for the use of such vehicle
as a whole for the carriage of passengers mentioned therein and
entered into by a person with a holder of a permit in relation to
such vehicle or any person authorised by him in this behalf on a
fixed or an agreed rate or sum -
(a) on a time basis, whether or not with reference to any
route or distance; or
(b) from one point to another; -
and in either case, without stopping to pick up or set
down passengers not included in the contract anywhere
during the journey, and includes -
(i) maxi-cab; and
(ii) motor-cab notwithstanding that separate fares are
charged for its passengers.”
Section 74. Grant of contract carriage permit. - (1) Subject to
the provisions of sub-section (3), a Regional Transport Authori-
ty may, on an application made to it under section 73, grant a
contract carriage permit in accordance with the application or
with such modifications as it deems fit or refuse to grant such a
permit :
Provided that no such permit shall be granted in respect of any
area not specified in the application.”
A bare perusal of Section 74 read with Section 2(27) of the
MV Act discloses that in case the motor vehicle as a whole is
to be used for carrying the passengers under a contract and
fees for such usage is payable on time basis or point to point
basis, then the permit which has to be obtained is called con-
tract carriage permit. Further, MV Act provides for a separate
license in case contractor wishes to engage in rent a cab busi-
ness. Accordingly, it is clear that running motor vehicles as a
whole on hire basis require contract carriage permit and run-
ning specifically cabs as whole on rent basis require cab rent
GST LAW TIMES  26th March 2020  263