GST on Stage and Contract Carriage
GST on Stage and Contract Carriage
Exordium
In GST law the taxation in the business of passenger transportation can be divided under following categories:
a) Where entire vehicle is not used
b) Where entire vehicle is used
Where entire vehicle is used further divisions can be made as under:
a) Distance based Journey
b) Place to Place Journey
c) Time based Journey
Time based journey can be further divided into:
a) Renting with operator
b) Renting on Leasing without operator
Leasing can be further divided into
a) Finance Lease
b) Operating Lease
The discussions in this article has been made on the basis of above conceptual bifurcation
Stage Carriage as per Section 2(40) of the Motor Vehicle Act
2(40) “stage carriage” means a motor vehicle constructed or adapted to carry more than six passengers excluding the driver for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey;
Contract Carriage as per section 2(7) of the Motor Vehicle Act:
“contract carriage” means a motor vehicle which carries a passenger or passenger or passengers for hire or reward and is engaged under a contract, whether expressed 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) a maxicab; and
S.2(22): “maxicab” means any motor vehicle constructed or adapted to carry more than six passengers, but not more than twelve passengers, excluding the driver, for hire or reward
(ii) a motor cab notwithstanding that separate fares are charged for its passengers
S.2(25) “motorcab” means any motor vehicle constructed or adapted to carry not more than six passengers excluding the driver for hire or reward;
Comparison between Stage Carriage and Contract Carriage
| Stage Carriage [S.2(7)] | Contract Carriage [S.2(40)] |
| Constructed or Adapted to carry more than 6 passengers excluding driver |
No such restriction to carry 6 or more passengers excluding driver. It may be for less than 6 passengers . Motor Cab constructed or adapted to carry not more than 6 passengers are also included. Maxi Cabs, constructed or adapted to carry more than six passengers, but not more than twelve passengers,. excluding the driver is also included. Other Motor Vehicles with capacity to carry more than 12 passengers (excluding driver) or more than 13 passengers(including driver shall also be included) |
| For Hire or reward | For Hire or reward |
| Separate fares paid by or for Individual passengers | Fare is paid for use of vehicle as a whole on a fixed or agreed rate or sum |
| No contract for use of vehicle as a whole | Contract is entered with holder of permit or person authorized by him in relation to motor vehicle for for use of vehicle as a whole |
| Fare is Journey based-whole of Journey of motor vehicle or stages of Journey |
a. Time basis (with or without reference to route or distance) b. From one point to Another |
| Can stop to pick up or set down passengers during the Journey |
Can not stop to pick up or set down passengers not included in the contract anywhere during the journey. Passengers included in the contract can be set down or picked up. Section 88(8) of Motor Vehicle Act provides for grant of special permit to any public service vehicle including a stage carriage vehicle for carrying passenger or passengers for hire or reward under a contract, express or implied, for the use of the vehicle as a whole, without stopping to pick up or set down along the line of route passengers not included in the contract. Held in AAR Rajasthan Pawanputra Travels 2019 (21) G.S.T.L. 328 (A.A.R. – GST) that supply of non AC vehicle to army does not fall under contract carriage because the essential ingredient of a contract carriage is that it plies under a contract for a fixed set of passengers, and does not allow any other passenger to board or alight from the carriage at will. A ‘contract carriage’ carries passengers as a group and cannot pick up passengers en-route |
Effect of Conversion of Stage Carriage into Contract Carriage
A vehicle having “stage carriage” permit like buses owned by the appellants, to operate for private persons/marriage parties under a contract, such buses will then necessarily be required to obtain a contract carriage permit or a special permit as aforesaid. In our view, once such a contract carriage permit or a special permit is obtained, the bus will then no longer have the character of a stage carriage but will instead acquire the colour of a contract carriage/special permit carriage. [Hyd Tribunal in ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION 2018 (10) G.S.T.L. 504 (Tri. – Hyd.)]
| Tourist Vehicle is also contract carriage constructed or adapted and equipped and maintained in accordance with such specifications as may be prescribed in this behalf. [2(43) of Motor Vehicle Act]. The specifications have been provided under Rule 128 of the Central Motor Vehicles Rules framed under the Motor Vehicles Act. The said Rules apart from the other things provide for the structure of the vehicle, entrance and exit of the passengers, emergency exit, driver entry and exit, windscreen, rear windscreen, windows, ventilation and luggage holds at the rear or at the sides or both, of the vehicle with sufficient space and size, luggage racks, seats and seating arrangements letting etc. |
| Motor Cycle can also be contract carriage. |
| Ride sharing arrangements for splitting travel cost such as fuel and toll, if are for fixed or agreed rate or sum, then they shall enter contract carriage. If there is pure sharing of fuel cost and toll, then it shall not be a contract carriage. |
|
House Boat is hotel in water and not contract carriage. [KERALA BACKWATERS PRIVATE LIMITED 2019 (22) G.S.T.L. 93 (Tri. – Bang.)] |
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