You may perhaps be aware that the GST Council in its meeting held on 20.09.2019 at Goa recommended that in the case of registered persons other than body corporate (e.g. proprietorship, HUF or partnership firm) engaged in renting of vehicles and paying 5% GST (without availing ITC), GST should be paid by the recipient of service if it is a body corporate entity. In other words, the services of renting of motor vehicle from non-body corporate entity to body corporate entity is brought under reverse charge mechanism (RCM), as was the practice during pre-GST regime.
2. To implement the recommendation of GST Council, the Govt. has issued notification No. 22/2019-CT (R) dated 30.09.2019 to amend the parent RCM notification No. 13/2017-CT (R) dated 28.06.2017 issued under section 9(3) of CGST Act, 2017. Under the parent notification, specified services such as services of GTA, Advocates, sponsorship services, services provided by the Govt. / local authority, security services supplied by non-body corporate person, services provided by a person located in a non-taxable territory to any person located in the taxable territory etc. are already subjected to RCM provisions under GST law. The Govt. has now enlarged this list to cover rent-a-cab services provided by individuals, partnership firms etc. to body corporate. The amendment has come into force from 01.10.2019.
3. The RCM provisions requiring the body corporate (recipient of service) to discharge GST will apply in the following conditions:-
(a) The service provider / cab operator is a non-body corporate person i.e. a proprietorship concern, HUF or partnership firm.
(b) The cab operator is unregistered or at the best charging 5% GST in the bill without availing ITC.
(c) The service recipient is a body corporate i.e. a company including private limited company or corporation set under separate statute.
In case all the above 3 conditions are fulfilled, GST will be paid by the service recipient (body corporate) on their own under RCM.
4. The RCM provisions are not applicable in the following situations:-
(a) The cab operator / service provider is a body corporate; or
(b) The cab operator / service provider is paying 12% GST (normal rate under HSN Code 9964) with or without availing ITC; or
(c) The service recipient is not a body corporate i.e. it is a proprietorship or partnership firm.
5. In case the cab operator and service recipient are located in the same State / U.T., the service recipient will pay 2.5% CGST + 2.5% SGST under HSN Code 9964 without availing ITC of goods or services used in rent-a-cab service. In case the cab operator and service recipient are located in different States / U.T., IGST @5% will be paid by the recipient body corporate.
6. Please also note that having paid GST / IGST on RCM basis, input tax credit would still not be available to the body corporate / service recipient. Under section 17(5) of CGST Act, 2017, renting or hiring of motor vehicle having approved seating capacity upto 13 persons (including driver) is not allowed as input tax credit. In view of this specific bar, GST liability paid by the body corporate on RCM basis will be an additional revenue cost.
7. We may clarify that leasing of motor vehicles (HSN Code 9973) from a non-body corporate to corporate entity is not covered by RCM provisions.
Since the RCM provisions casting statutory obligation on the body corporate / service recipient have already come into force from 01.10.2019, we advise you to comply with the provisions and while making payment to the cab operator, create your GST liability and deposit the same by 20th of the month succeeding the month in which payment is made to the cab operator. In case the cab operator has charged 5% GST, you may not reimburse the same and advise him not to charge GST in the bills in future as your company will be paying GST under RCM provisions.
We advise you to make a note of above special provisions and start complying with the same. In case you have any query in this matter, you may write to us for our clarification.
Author Bio
A body corporate is a recipient of Rent a Cab service from unregistered person and paying RCM @ 5%, can he claim the ITC or not ?
Since the matter here is tricky as the recipient of service and having paid GST / IGST on RCM basis, input tax credit would still not be available to the body corporate / service recipient. Under section 17(5) of CGST Act, 2017, renting or hiring of motor vehicle having approved seating capacity up to 13 persons (including driver) is not allowed as input tax credit. In view of this specific bar, GST liability paid by the body corporate on RCM basis will be an additional revenue cost.
So please clarify on the input availability to the recipient.
Dear Sir, Service provider of rent a cab / volvo bus has status of Propritor under GST registration and we are limited company . till now we are paying tax 5% under RCM . now service provider wants to bill with 12% under forward charge . we can accept the same and no need to deposit tax under RCM . please suggest.
I am running a Private Co.Ltd. and providing Service as Tour Operator Service. I avail a service from Rent a Cab operator (Proprietorship Firm) and pay RCM @5% and this Service Provide to my client under Tour Package. Can i avail as ITC?
Is there a provision if the daily expense is less than Rs 5000, then GST under RCM need not be paid for taxi hiring services.?
If a service recipient of Delhi booked a cab in Gujarat and the cab operator is of Gujarat what GST to be picked in that case as the Gujarat cap operator booked CGST, SGCT as the place of supply and sate is same but service recipient of Delhi have to book IGST so what to do in this case
Gujrat Cap Operator will do charge CGST & SGST.
you will do book GST as block Credit.
Hi All,
We are obtaining cab service from proprietor and he is charging 5% GST. If we ask vendor for not to charge GST how much we need to pay under RCM.
Please Clarify
Thank you in advance
Hi one of my client cab service charging 5% GST. Can we ask him to stop charging 5% and the same 5% can be paid under RCM or do we need to pay more than 5% please clarify.
an individual providing rent as cab services to another indiual main contracor who in turn providingb the services to body corporate and the whole of gst is being taken care and paid by the receipient of services i.e. body corporate
my question is whether the main contractor who is billing to the body corporates without charging gst since under RCM
tHE OPAYMENTS MADE BY THE MAIN CONTRACTOR TO SUB XCONTRACTOR WHETHER NEEDS TO PAY ANY GST OR THEIR SELF DECLARATION IS ENOUGH
AS THE WHOLE OF SERVICES GST IS BEING PAID BY THE BODY CORPORATE
PLEASE CLARIFY
I am paying gst @12% and providing services to body corporate whose pay my Gst under RCM @ 5% .
It’s right practice or not??
Please advise me.
I didn’t understand anything explain properly please…
Sir,
Whether RCM on renting of car applicable in case if we are normally hiring a taxi (i.e. not utilising rent-a-car facility but availing service of taxi). RCM applicable only on renting not on hiring?
I AM A REGISTERED PERSON {PROPRIETORSHIP} RENT CAR SERVICE PROVIDER .WHAT WIL THE TAX RATE FOR CORPORATE BODY AS WELL AS PROPRIETOR SHIP INTER-STATE SUPPLY SERVICE.
PLEASE REPLY AT ERLIEST.
THANKYOU.
I am providing gst services@12% and providing services to body corporate whose pay my Gst under RCM @ 5% .
It’s right practice or not??
Please advise me.
IF U ARE FILING YOUR GSTR-1 RETURN AND GIVING CREDIT TO THEM , IT IS NOT REQUIRED TO PAY RCM BY THE RECIPIENT
I am paying gst @12% and providing services to body corporate whose pay my Gst under RCM @ 5% .
It’s right practice or not??
Please advise me.
Did you get answer for your question regarding GST 12%and 5% under RCM for corporate body. I have same problem , so please share your openion with us
sir, we are cab aggregator, please let me know if
1. Toll & Parking Charges, is GST payable on this.
2. Driver Night Allowance & Drivers Food Allowances, is GST payable, if yes What % will be applicable.
Sir,
I have to query regarding RCM under Rent a Cab:-
1.We have hired a car on monthly rent from a unregistered person.
We are paying RCM on this already.
2. We hire car from unregistered person some time to provide service to some individual person then it is also applicable for us to pay RCM on this?
3. Some time we also hired taxi or auto from unregistered persons from transportatin our goods. Is it also come under RCM on rent a cab and it is also applied to us to pay RCM on this?
Please suggest your valuable opinion.
Dear Experts,
If Taxi service provider charges parking & toll tax in invoice please confirm this amount is chargeable under RCM or not?
SIR IF THE CAB OPERATER WHO IS INDER 5% TAKES CAB FROM ANOTHER CAB OPERATER WHO IS UNDER 12% , CAN THE FIRST CAB OPERATER AVAIL INPUT CREDIT OF THE 12% HE HAS PAID UNDER B2B.
Sir my question is that my client is a proprietor and he is offering cab services to pvt ltd and he used to charge 5% GST
At the same time he is hiring cabs from the other vendors for providing the services. they are also charging 5% GST. Earlier he was taking input of the same.
Now the pvt ltd co is paying GST on reverse charge basis and his sub vendors are charging gst on their bills so it has become a cost to my client.
Please suggest a way out.
Thanks
If a Rent-A-Cab service provider is Un-Registered individual & service receiver is a Body corporate, then whether Body corporate is liable to pay GST @ 5% under RCM?
Our pvt ltd company hiring car rental services not charging any GSt to us …whether we have to pay RCM ..if yes at what rate…pls confirm
Sir,
I have a partnership firm, through wihich we are providing cab services to corporate or non corporate body with 5% GST. After this notification, should I charge 5% GST to non corporate body?
Our Compay is pvt ltd company for car hire service from individual body we have to pay RCM charges???
if Service provider is registered ,and we are corporate body, Supplier is not charging tax in his bills, can we pay RCM @ 5%? Please clarify
Service provider is registered ,and we are corporate body, Supplier is not charging tax in his bills, can we pay RCM @ 5%? Please clarify
Dear Sir,
RCM is applicable to my company. I want to know can I take the input tax credit on GST paid under RCM.
Dear sir,
If service recipient was registered who taken cab rent from un-registered person they would paid RCM basis @5% or @12% what could we taken as input?
Sir please clarification give me on that If Service Receiver deposit GST under RCM, that GST amount will refelect to Service Provider any where in his GST portal
What if employee claims reimbusement from company against his travel via car from an unregistered dealer. Will the company pay rcm on those bills also?
If I am non-body corporate registered person and service providing to body corporate so i will not charge gst in my bill due to RCM but same service taking from non-body corporate registered person so he will charge gst bcz i am not body corporate than i can take gst refund
Dear Sir,
As per the notifcation, service provider shall be non-body corporate person who is paying GST @ 5% without availing input. It means service provider should be registered person. Accordingly, if any unregistered person giving services of motor vehicle, it will not cover under RCM.
Also clarify, difference between renting of motor vehicle and leasing of motor vehicle as per Act.
Cab operator in his GST return where will he show the outward supplies under GSTR 3B?
Sir, Under RCM for Rent a Cab if the supplier has already paid GST then what should the receiver (Pvt. Lt. or Public Ltd. Co.) do. Should the receiver again pay 5% GST ?
WE ARE GST REGISTERED PVT LTD CO. AND SERVICE PROVIDER IN RENT A CAB SERVICE BUT WE ARE TAKING A SAME SERVICE FROM UNREGISTERED PERSON WHO IS PAID RCM AND TAKING THE ITC OF RCM
Dear sir,
Thank for the article.
One doubt is with return prospective in the side of proprietor if he supply service to body corporate as well others. On body corporate bill gst will not be charged how to show it in return…
Dear Sir,
We have only doubt is that the same notification is under 9(3) of CGST Act . Section 9(3) is applicable for Registered person and Section 9(4) is applicable for unregistered person. Kindly give your valuable advice about my doubt.
There is a confusion for many, regarding RCM on commercial Rent paid to URP. Is RCM is applicable on such rent paid. If yes, then from which date it’s made applicable, the % tobe paid paid by regular dealer/composite dealer ?. If not payable, then please share the details. 🙏🏻🙏🏻
I need a clarification about RCM on renting of motor vehicle.
If service provider or cab operator is unregistered then shall we need to pay GST on the same as RCM?
Notification stating that if 1) Service provider is non body corporate 2) Service provider must charge GST at 5%(FCM) GST without ITC .
3) Service recipient must be body corporate.
If all the conditions are fulfilled is comes under RCM Under 9(3) of CGST Act.
My question is Point No.2
Please clarify why service provider shouldn’t charge GST 5% on his bills.
Please elaborate the Point NO.2
560079
Respected Atul ji, your article is very useful. One small dought on the same. You had mentioned that, RCM is also applicable if the cab operator is unregistered. However, in my view, there is no such mention in the notification. I will be highly oblighed if you can clarify on the same.