Tamil Nadu State Transport Corporation Is State Transport Corporation, Do Not Fall Under Definition Of Rent-A-Cab Scheme Operator: CESTAT

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Tamil Nadu State Transport Corporation is a state transport corporation and does not fall under the definition of a rent-a-cab scheme operator.The bench of S.S. Garg (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that the business undertaken by the assessee is to provide bus facilities and transport facilities to the citizens, and the main activity is running the buses in the city for the convenience of citizens and not a rent-a-cab scheme operation.The appellant is a 100% owned undertaking of the Government of Tamil Nadu providing transport facilities to the public, is registered with the Service Tax Department, has been paying service tax on GTA services and the sale of space services, and is regularly filing ST-3 returns.The department noted that the appellant is evading payment of service tax by providing vehicles to government departments, sister concerns, and private parties. Subsequently, a show cause notice was issued alleging that the appellant had provided Rent-a-Cab operator services without getting an appropriate amendment to the Service Tax Registration Certificate, without paying service tax, and without filing the prescribed half-yearly returns in respect of the services with the intention of evading payment of service tax. It is accordingly proposed to demand a sum of Rs. 1,38,571 as service tax along with interest. It was also proposed to impose penalties.The appellant filed a detailed reply to the SCN, and after following due process, the original authority confirmed the demand in the SCN with appropriate interest and also imposed a penalty.The appellant filed an appeal before the Commissioner (Appeals), which was rejected.The assessee contended that the appellant is a state government corporation owned by the State of Tamil Nadu, and they have no intention to evade payment of legitimate tax due to the Central Government. It is only a question of interpretation of the statutory provision, and the appellants had a bona fide belief that they were not covered by the entry Rent-a-Cab operator scheme. The adjudicating authority and the appellate authority have not considered the submissions made by the appellant. As per the statutory definition, 'Rent-a-Cab operator scheme' means any person engaged in the business of renting cabs. The appellants are not “engaged in renting a cab operator scheme” and do not fall under the definition. A person can be said to be engaged in the business of renting cabs if he carries on a business not as an isolated act or transaction but as an organized and fairly continuous activity.The tribunal held that the order is not sustainable in law and therefore liable to be set aside by allowing the appeal of the appellant with consequential relief, if any, as per law.Counsel For Appellant: M.N. BharathiCounsel For Respondent: M. AmbeCase Title: M/s. Tamil Nadu State Transport Corporation (Salem) Ltd. Versus The Commissioner of GST & Central ExciseCase No.: Service Tax Appeal No.42087 Of 2014Click Here To Read The Order

Tamil Nadu State Transport Corporation Is State Transport Corporation, Do Not Fall Under Definition Of Rent-A-Cab Scheme Operator: CESTAT

Mariya Paliwala

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Tamil Nadu State Transport Corporation Is State Transport Corporation, Do Not Fall Under Definition Of Rent-A-Cab Scheme Operator: CESTAT

Mariya Paliwala

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INR 1099+GST

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