Advance Ruling Sought on Service Tax

­ Whether the car lease scheme of providing vehicles to employees would be regarded as a ‘service’:

Facts : The applicant was to hire the cars from the car leasing companies and under the scheme those cars would be made available to such employees who are firstly continuing to be the employees of the applicant and secondly who accept the option to have the car for their personal as well as official use and in lieu of this, the company was to charge the said employees the same amount which the applicant would be paying to the car leasing company from whom they hire the car.

Findings: There can be no dispute that the service of “making available” a car to the employee is being rendered by the applicant. In this context, both the conditions are fulfilled which are conditions in clause (b) of Section 65B (44).

Firstly, it is in the course of the employment because the agreement between the applicant and employee clearly suggests that this will be during the course of his employment only.

Second condition is also satisfied that it is only because the employee is in service and in that sense the service becomes in relation to his employment.

Advance Ruling :

A company providing car lease to its employees will not amount to ‘service’.

(Citation :2015­-TIOL­-12-­ARA-­ST )