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.

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Qualification: MBA
Company: Polyplex Corp. Ltd
Location: Bazpur, Uttarakhand, IN
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  1. Achal says:

    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.

  2. Raghuvansh Bisht says:

    Dear Experts,
    If Taxi service provider charges parking & toll tax in invoice please confirm this amount is chargeable under RCM or not?



  4. Naveen Gupta says:

    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.

  5. Mangala says:

    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?

  6. Rajesh Tanksali says:

    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

  7. Rajeev Ranjan Kumar says:

    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?

  8. PARAG SHAH says:

    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

  9. PARAG SHAH says:

    Service provider is registered ,and we are corporate body, Supplier is not charging tax in his bills, can we pay RCM @ 5%? Please clarify

  10. tvvsnraju says:

    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?

  11. Jagmender says:

    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

  12. Aayush says:

    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?

    1. Atul RAstogi says:

      RCM will not applicable in this case when taxi bill in the name of Employee.

      RCM always will applicable when taxi bill in name of Company name.

  13. Sonu says:

    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

  14. Sourabh Goenka says:

    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.

  15. Bharat Rathod says:

    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 ?

  16. NILESH says:


  17. Rahul prasad says:

    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…

  18. Sibajit Thakur says:

    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.

  19. Rajendra says:

    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?

      1. sagar says:

        Sir, as per notification no. 22/2019, it is not clear whether RCM applicable on un-registered person or not as notification says RCM applicable only in case of person charging 5% GST

  21. Kumar.H says:

    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

  22. Kaustubh Ram Karandikar says:

    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.

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