Reverse Charge - Renting of Motor Vehicle

[Kaustubh Karandikar]

As per the amended notification issued recently, 1) if a supplier charges 5% GST on renting of motor vehicle, the body corporate need to tell him not to charge since body corporate is required to pay under RCM? Or 2) the supplier can charge 5% but still body corporate need to pay under RCM? If the second situation is valid, will it not be double taxation since body corporate is not eligible to claim ITC on this service being under negative list?

AI Summary

Clarification on GST Reverse Charge Mechanism for Motor Vehicle Rentals: Supplier vs. Body Corporate Responsibilities A discussion on the Goods and Services Tax (GST) regarding the reverse charge mechanism (RCM) for renting motor vehicles. A query was raised about whether a supplier should charge 5% GST or if the body corporate should pay under RCM, potentially leading to double taxation. Respondents referred to Circular No. 130/2019 and Notification No. 29/2019, clarifying that for services to a body corporate, the RCM applies, and suppliers should not charge GST. For non-corporate services, the supplier charges 5% GST. The consensus was that the body corporate should not be charged directly by the supplier.