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GST RCM on Renting of Vehicle
Notification No. 21/2019 dated 30/09/2019 under IGST Act, 2019 applicable from 01/10/2019
Notification No. 22/2019 dated 30/09/2019 under CGST Act, 2019 applicable from 01/10/2019
Notification…….
| Services provided by way of renting of a motor vehicle provided to a body corporate | Any person other than a body corporate, paying integrated tax at the rate of 5% on renting of motor vehicles with input tax credit only of input service in the same line of business |
Any body corporate located in the taxable territory. |
| Services provided by way of renting of a motor vehicle provided to a body corporate | Any person other than body corporate, paying central tax at the rate or 2.5% on renting of motor vehicles with input tax credit only of input service in the same line of business |
Any body corporate located in the taxable territory. |
Renting of Vehicle Means
Difference between Renting of vehicle/Transport of Passenger
| Key attribute | Renting of a Motor Vehicle | Contract for Transport of employees or Passenger |
| Intent | Hire of a motor vehicle with or without a Driver | To pick & drop the desired list of employees or passengers at the instruction of the employer |
| Periodicity | On need basis | On a continuity basis |
| Pricing | Basic fare + variable component on use basis | Fixed fare + variable component for kms or extra hours |
| Knowledge on place of use | Usually not a pre-condition to specify the location/ destination for such renting of a motor vehicle | Pre-defined specific route shall be confirmed. On need basis within a territorial jurisdiction the motor vehicle shall ply as per the contract |
| Risk & responsibility | Owner oT the vehicle casts responsibility on the buyer tor proper maintenance of such motor vehicle in the course of contract period to use such vehicle | Owner of the vehicle takes ultimate responsibility to upkeep and maintain the vehicle in proper working condition and little responsibility tasted on the recipient for its usage |
Renting of vehicle within Maharashtra
Renting of vehicle outside Maharashtra
GST Implication
- RCM is applicable on even on employees reimbursement.
- RCM is not applicable on OLA / Uber / Meeru, etc. being body corporate.
- Input tax credit of payment made under RCM is not available. i.e. it is cost
- to the company.
- If vendor is charges GST more than 5% then GST RCM is not applicable.
- Solution is to avail services from corporate vendors.
- Another solution is to change employee traveling policy.
Conclusion
- GST RCM is applicable on Renting of vehicle taken from non body corporate service provider charging / indicating IGST @ 5% or CGST @ 2.5%.
- RCM has to be paid in cash.
- No GST credit is available on the same.
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Author Bio
one of my client has rented bolero car, on fixed rent, to airport authority of India, how the invoice should be raised ?? with gst ? or rcm ? who will pay rcm ??