TaxTMI 
TaxTMI 
A partnership firm is providing bus services to a body corporate and not charging GST in the invoice. Whether the body corporate is required to pay GST under reverse charge? If yes whether GST under reverse charge is @ 5% or 12%or 18%?
RCM on bus services
21 Oct 2023 
7 Replies 
5221 Views Asked by
Reverse charge liability hinges on whether the supply is renting of a vehicle or passenger transport, determined by contract terms.
Whether GST is payable under reverse charge for bus services depends on classification as renting of motor vehicle versus transport of passengers; contract terms and the factual matrix determine applicability. If classified as renting of motor vehicle, reverse charge may apply and the recipient must pay tax at the notified rate and may claim input tax credit where eligible. Administrative guidance recommends examining the agreement and following the circular's parameters to distinguish the categories to avoid disputes. (AI Summary)
Whether GST is payable under reverse charge for bus services depends on classification as renting of motor vehicle versus transport of passengers; contract terms and the factual matrix determine applicability. If classified as renting of motor vehicle, reverse charge may apply and the recipient must pay tax at the notified rate and may claim input tax credit where eligible. Administrative guidance recommends examining the agreement and following the circular's parameters to distinguish the categories to avoid disputes. (AI Summary)