Place of Supply for Rent a Cab services

[Meenu Agarwal]

Our Unit is registered in Karnataka. We are having multiple project sites in different states which are added as addl place of business in the GST registration of our sister units registered in respective states. With the recent amendment, RCM is applicable to rent a cab services provided by any person other than a body corporate. The cab services are utilized in almost all sites. The Work order and payment to the service provider will be made by us. As per the provisions of section 12(9)(a) of IGST Act, the place of supply for rent a cab service is the location of the registered service recipient.

In this reference, kindly confirm,

(i) Can we consider our unit as the location of the service recipient and remit RCM in Karnataka, or

(ii) Intimate to other sister units for remittance in their respective states GSTN.

[Rajagopalan Ranganathan]

Madam/Sir,

In my opinion you have to intimate other sister units for remittance in their respective states GSTN. Registration under GST Law is state specific and there is no provision for centralized registration and payment of tax in centralized manner.

[KASTURI SETHI]

I support the views of Sh.Ranganathan, Sir. I further add that the additional place of business can be declared within State in the application for registration.

[PAWAN KUMAR]

I endorse the views of both the experts. As per my view since place of supply is location of registered person in different states, to claim benefits under RCM it will better to have different remittance statewise GSTINwise and also discharge RCM liability.

[Ganeshan Kalyani]

Second option as stated by you is the only option correct in this case.

[CA Hemanth Kumar]

Dear Sir,

In case if work order is received in the name of Karnataka unit and payment for suppliers are made from karnataka, recipiant of services would be the karnataka unit in terms of section 2(93) of the CGST Act, 2017. CGST+SGST/IGST needs to paid based on the location of supplier of service.

Further, Karnataka unit needs to do cross charge for the such services provided to their sister concerns being a related party transactions.

To avoid all this issue, suggested to take work order and make payment from sister concerns.

[PAWAN KUMAR]

Dear Sir,

In such a case, bill to ship to model can be useful. Supplier of service can raise bills on Karnataka office as buyer and respective site office as consignee. secondly Karnataka office will raise invoice to site office.

[KASTURI SETHI]

After going through all the replies, I am of the view that reply given by Sh.Pawan Kumar Ji at serial no.3 above, is clear, best, safe, convenient and foolproof.

AI Summary

Place of supply rules require RCM remittance by recipient location, requiring statewise GSTIN compliance not centralized. Place of supply for rent-a-cab services under Section 12(9)(a) of the IGST Act is the location of the registered service recipient, and RCM applies to services by persons other than body corporates. RCM liability and tax remittance must follow the recipient's state-specific GSTIN; centralized registration or centralized tax payment is not permitted. If work orders and payments are made by the Karnataka unit it will be treated as recipient for GST purposes, necessitating tax accounting based on supplier location and possible cross-charges or use of a bill-to/ship-to invoicing model to allocate tax liability statewise.