RCM on renting of motor vehicles : Notification No 29/2019 CT (Rate)

This article explains Notification No 29/2019 CT (dated 31 12 2019) and Circular F No 354/189/2019 TRU on RCM under GST on Renting of Motor Vehicles

Suppliers of service by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient have an option to pay GST either at 5 with limited ITC (of input services in the same line of business) or 12 with full ITC

Supply when provided by suppliers paying GST @ 5% to corporate entities was placed under RCM w e f 01.10.2019

Entry 15 of the notification No. 13/2017 CT (R) dated 28.6.17 prior to amendment

Sl. No. Nature of Service Service Provider Service Receiver
15 Services provided by way of renting of a motor vehicle provided to a body corporate. Any person other than a body corporate, paying central tax at the rate of 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.

Entry 15 of the notification No. 13/2017 CT (R) dated 28.6.17 after amendment

Sl. No. Nature of Service Service Provider Service Receiver
15 Services provided by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient, provided to a body corporate. Any person, other than a body corporate who supplies the service to a body corporate and does not issue an invoice charging central tax at the rate of 6 per cent. to the service recipient Any body corporate located in the taxable territory.

Clarificatory amendment applicable w.e.f 01.10.2019

• Thus, RCM shall be applicable on the service by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient only if the supplier fulfils all the following conditions

• is other than a body corporate

• does not issue an invoice charging GST 12 from the service recipient and

• supplies the service to a body corporate

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