Input Tax Credit — Input tax credit — In the instant case, applicant is stated to be supplying cabs on a rental basis, seeks a ruling on whether credit is admissible of the input tax paid on the purchase of motor vehicles for the supply of the above service.

Held that — Rent-a-cab is not defined in the GST Act. Nature of the Applicant’s service is, therefore, derived from what is stated in the Application and what can be ascertained from the invoices. The Applicant provides cab rental service inter alia to institutions like West Bengal Postal Service. The recipient, has to pay the Applicant a certain amount per month as consideration irrespective of what distance the cab travels in a particular month. Additional amount has to be paid if the cab is retained for extra hours or requisitioned on holidays. For the purpose of covering the cost of fuel, the distance travelled needs to be brought into play, but only if it crosses a certain threshold.

It is, therefore, clear from the above discussion that the nature of the service the Applicant provides is classifiable under SAC 9966 as renting of a motor vehicle. Credit of GST paid on purchase of motor vehicles or other inputs for the supply of the Applicant’s service is not, therefore, admissible in terms of section 17(5)(b)(i) of the GST Act. — Mohana Ghosh, Carrying on Business Under The Trade Name M/S. Reesham Associates, In Re…. [2019] 13 TAXLOK.COM 002 (AAR-WB)