Reverse Charge - Renting of Motor Vehicle

[Kaustubh Karandikar]

RCM will be applicable / not applicable on renting of motor vehicle under these situations. 1) XYZ (Non – Body Corporate) taking on hire a vehicle from PQR where PQR is charging GST @ 5% to XYZ. This vehicle is further rented by XYZ to ABC (Body Corporate) where ABC will be required to pay GST under RCM. 2) XYZ (Non – Body Corporate) not registered with GST is renting his owned vehicle to ABC (Body Corporate) where ABC NOT required to pay GST under RCM. 3) XYZ (Non – Body Corporate) is renting the vehicle to ABC (Body Corporate) & charging GST @ 12% where ABC NOT required to pay GST under RCM. Experts views please.

AI Summary

Reverse charge on motor vehicle rental: applicability queried for hirer, unregistered owner, and taxed supplies under GST Query concerns applicability of the reverse charge mechanism (RCM) under GST to renting of motor vehicles in three scenarios: (1) a non body corporate hirer takes a vehicle on hire from a supplier who charges GST and then rents it to a body corporate-whether the body corporate must pay under RCM; (2) an unregistered owner rents an owned vehicle to a body corporate-whether the body corporate is liable under RCM; and (3) a non body corporate lessor charges GST at a higher rate when renting to a body corporate-whether RCM applies.