The following services relating to transportation of passengers, with or without accompanied belongings, have been specified in the Negative List. Services by:

•  a stage carriage;

•  railways in a class other than (i) first class; or (ii) an AC coach;

•  metro, monorail or tramway;

•  inland waterways;

•  public transport, other than predominantly for tourism purpose, in a vessel of less than fifteen tonne net; and

•  metered cabs, radio taxis or auto rickshaws.

Following terms have been defined in section 65B of the Act –

•  stage carriage

•  inland waterways

•  metered cab

Are services by way of giving on hire of motor vehicles to state transport undertakings covered in this negative list entry?

No. However such services provided by way of hire of motor vehicle meant to carry more than 12 passengers to a State transport undertaking is exempt.

In some cases contract carriages get permission or temporary permits to ply as stage carriages. Would such services be taxable?

Specific exemption is available to services of transport passengers by a contract carriage for transportation of passengers, excluding tourism, conducted tours, charter or hire.

  Are national waterways covered in the definition of inland waterways?


Proposed Exemptions under Mega Notification

1. Transport of passengers, with or without accompanied belongings, by:–

(a)  air, embarking or terminating in an airport located in the State of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Baghdogra located in West Bengal; or

(b)  a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire;

2. Services by way of motor vehicle parking to general public excluding leasing of space to an entity for providing such parking facility;

More Under Service Tax


  1. S.Venkataraman says:

    I remember to have read the speech of  our Finance Minister on the floor of Parliament and brought some changes by omitting the words “of less than fifteen tonne net;”  in the case of  transportation of passengers by vessel.   However in the above, the words are not removed.  What is the real position after the President’s assent on the bill?  Can any one state the correct position.

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May 2021