Reverse Charge

[Vivek anandhan]

Dear Experts

We are availing cab service from unregistered person, whether we need to pay GST under revers charge.

Also we are paying GST under reverse charge for availing service of cab service (Radio taxi)

Regards

Vivekanandhan

[KASTURI SETHI]

Rent-a-cab is not under RCM . So as individual not required to pay but if service is in the course or furtherance of business GST is applicable under reverse charge.

Pl go through Para No.3 which is relevant for you:-

Reverse charge system not applicable when an individual unregistered person sales goods or provides services not in furtherance of business - Sale of old jewellery by individuals to jewellers not subject to GST under Reverse Charge System

C.B.E. & C. Press Release No. 78/2017, dated 13-7-2017

[DR.MARIAPPAN GOVINDARAJAN]

Reverse charge is not applicable.

[Vivek anandhan]

Sir,

Thanks for the reply,

We are the manufacturer(registered) receiving rent a cab service from individual (unregistered person) to pay GST under RCM Sec 9(4).

Hope my understanding is correct.

Kasthrui sir, kindly confirm.

[KASTURI SETHI]

In my view, your view is correct.

[Himansu Sekhar]

In this case reverse charge is applicable. But if the total payment from all such unregistered sources is less than 5000 , no GST is payable

[Chhatra Jain]

I agree with Himansu Sekharji. If total URD exp does not crosses 5000/ no need to pay in RCM

[KASTURI SETHI]

Yes. It is natural. Agree with both experts.

[Himansu Sekhar]

Thank you jainji and kasturti sir.

[Chhatra Jain]

Welcome sir.......

[Raman Singla]

1. Can we claim RCM as ITC in the next month returns ????

2. Can we claim RCM as ITC in the future months if forget to filled in next month return ???

[KASTURI SETHI]

Already replied today.

AI Summary

Reverse charge on cab services applies where an unregistered supplier provides the service in furtherance of business, creating recipient GST liability. Reverse charge on cab services depends on whether the rent-a-cab supply by an unregistered individual is in the course or furtherance of business: if not, reverse charge does not apply; if it is supplied to a registered person for business, the registered recipient must pay GST under reverse charge. A small aggregate payment threshold to unregistered persons was discussed as excusing reverse charge in practice. Questions were also raised about claiming reverse-charge GST as input tax credit in subsequent returns.