notification no 22 CT rate 30/09/2019 RCM on Motor vehicles

[Madhavan iyengar]

If Motor vehicle is rented by a unregistered person ( individual/ firm) to a body corporate then body corporate has to discharge GST @5%

If Motor vehicle is rented by a GST Regd person ( indvidual/ firm) to a body corporate then body corporate has to discharge GST @5%

IF Motor vehicle is rented by a GST Regd person body Corporate to another body corporate then following to be checked on applicability of RCM

a) IF Body Corporate who is providing service and he avails credit of input services in same line of business and charges 5% GST on forward charge then no RCM

b) IF Body Corpoarte who is providing service and he does not avail credit of input services in same line of business then RCM will apply to the receipient body corporate

Experts kindly give your views on the above

AI Summary

Clarification on GST Reverse Charge: 5% GST on motor vehicle rentals to corporates; RCM varies by service provider status. A discussion on the applicability of the Goods and Services Tax (GST) under the reverse charge mechanism (RCM) for motor vehicle rentals to body corporates. If the vehicle is rented by an unregistered or registered individual/firm to a body corporate, the corporate must pay 5% GST. For rentals between body corporates, if the service provider is a body corporate and avails input service credit, no RCM applies. However, if the service provider does not avail input service credit, RCM applies to the recipient. An expert clarified that no RCM applies if the service provider is a body corporate.