Renting of motor vehicle

[KARAN VERMA]

If employee provide car on rent to company, then whether RCM @5% applicable.

Company also reimburse fuel cost and maintenance cost of car as perquisite to employee.

[KASTURI SETHI]

In the situation explained, RCM is not applicable inasmuch as Notification No.22/19-CT(R) stands amended vide Notification No.29/19-CT(R) dated dated 31.12.19.

[KARAN VERMA]

But sir, department will contend why company not paid RCM @ 5%, eventhough both rent and fuel cost reimburse to the employee by company.

[KASTURI SETHI]

Dear Sh.Karan Verma Ji, Re-examined the whole issue. RCM is applicable.

[KARAN VERMA]

Sir, in my view, as per RCM notification not applicable on renting of buses.

And if individual provide bus on rent to company, then GST @ 18% will be applicable.

Whether i am correct ?

[Ganeshan Kalyani]

Services provided by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient, provided to a body corporate.

The above reproduced text from RCM notification indicates that there is no difference between car and bus. The term is motor vehicle. Hence, even for bus RCM is applicable.

[KASTURI SETHI]

Yes. Bus is also a motor vehicle. The querist must see definition of motor vehicle as per Motor Vehicle Act as well as legal dictionary.

AI Summary

Reverse charge mechanism on motor vehicle rentals can apply where fuel costs are included and supplied to a body corporate. RCM under GST on renting of motor vehicles depends on whether the service is supplied to a body corporate and whether the cost of fuel is included in the consideration; the notification language treats 'motor vehicle' generically to include cars and buses, and reimbursements as perquisites are factual elements relevant to determining RCM liability.