RCM Motorvehicles

[Madhavan iyengar]

In terms of notification dated 22/2019 CT regarding RCM on rentals of Motor vehicles in view of the provisions

a) the Individual/ Firm/LLP who are supplying the service to a body corporate can't charge 12% GST since the service is being supplied to a body Corporate who has to discharge GST on RCM @5%

b) However if individual// firm/LLP supplying the service to individual/firm/LLP they can continue to charge 12%

Expert views solicited

AI Summary

Clarification on GST for Vehicle Rentals: 5% RCM for Body Corporates, 12% for Individuals, Firms, LLPs. A discussion on the Goods and Services Tax (GST) implications for renting motor vehicles under reverse charge mechanism (RCM) was initiated. The query focused on whether individuals, firms, or LLPs supplying such services to a body corporate should charge 12% GST or if the body corporate should discharge GST at 5% under RCM. It was clarified that LLPs and firms, not being companies under the Companies Act, 2013, are not considered 'body corporates.' Therefore, when supplying services to a body corporate, the service falls under RCM. Experts agreed that services to individuals, firms, or LLPs can continue to charge 12% GST.