Reverse Charge - Renting of Motor Vehicle

[Kaustubh Karandikar]

XYZ Ltd. Is hiring Bus (More than 13-seater capacity) for transporting the employees. The supplier of bus service is not charging GST being not registered with GST and is a proprietor. Is XYZ Ltd. liable to pay GST on it under reverse charge?

[Prudhvi Jakkula]

No. As the services are being received from unregistered person, the company is not required to pay tax under RCM. Reason for the same is, at present 9(4) is inoperative except for the services which are mentioned in the notification(In notification, goods and services related to real estate were mentioned which are in no way related to above query). Also 9(3) does not cover the above mentioned service.

So the company is not required to pay tax under rcm

[Ganeshan Kalyani]

The service provider other than company who is paying tax @5% provides a service of renting of motor vehicle to a company then the receiving company has to pay tax under reverse charge. In your query the provider of service is not registered. Hence reverse charge is not applicable.

AI Summary

XYZ Ltd. Not Liable for GST on Bus Hire: Section 9(4) Inoperative, Section 9(3) Not Applicable XYZ Ltd. is hiring a bus with more than 13 seats for employee transportation from an unregistered proprietor who does not charge GST. The question is whether XYZ Ltd. must pay GST under reverse charge. Two responses clarify that XYZ Ltd. is not liable to pay GST under reverse charge. The first response states that current regulations under section 9(4) are inoperative, and section 9(3) does not cover this service. The second response confirms that since the service provider is unregistered, reverse charge is not applicable in this situation.