GST query- Rent a cab service

[VENKAT S]

A person who is providing Rent a cab service opts for payment of 5% GST (without ITC). Is he liable to pay under reverse charge on the amounts payable to unregistered suppliers(from whom he obtains rent a cab service)? If yes, how much is the rate? is it 18% or 5%? Can he avail input credit of the same?

AI Summary

Reverse Charge Mechanism Applies Only to E-Commerce Cab Operators, Not Those Opting for 5% GST Rate Without Input Credit. A person providing rent-a-cab services at a 5% GST rate (without input tax credit) inquires about reverse charge liability when using unregistered suppliers. The response clarifies that only e-commerce cab operators like Ola and Uber are subject to reverse charge mechanism (RCM). Normal cab operators opting for 5% GST cannot claim input tax credit, even if they make unregistered purchases. If opting for 18% GST, input tax credit becomes available. The discussion emphasizes that under the 5% option, the operator cannot avail input credit, and the liability must still be discharged.