GST Rate for Cab service provider

[Rajbir Yadav]

There are two rate for Cab service provider, either he can charge GST @18% with ITC or he can do the billing @5% without ITC. If individual (proprietorship firm) do the billing by opting to pay @5% to body corporate, it comes under RCM. So my query in this is : can service provider do the billing to few body corporate by opting GST @18% with ITC and to few other @5% without ITC which will fall uder RCM and avail the ITC proprotionately in proportion to the billing @18%.

[Sadanand Bulbule]

A motor cab operator cannot selectively charge 5% GST without ITC for some clients and 18% GST with ITC for others, since the concessional 5% rate is subject to the condition that no input tax credit is availed on inputs and input services used for providing that service. Such a condition operates at the supplier level and not on an invoice-wise basis, and therefore the rate option cannot be exercised selectively for different clients.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

Notification No. 22/2019-CT (R) dated 30th September, 2019, inserted Entry Number 15 by amendment to the principal Notification No. 13/2017-CT (R) dated 28.06.2017, effective from 01.10.2019, that a body corporate receiving services from any individual cab Services provider is liable to tax payable @5% under RCM. He cannot charge the body corporate 18% tax on forward charges.

Further, the individual cab service provider cannot charge both a 5% and an 18% tax. He should opt for either a tax of 5% without ITC or 18% with ITC, but not both.

AI Summary

GST rate choice: whether cab providers can split supplies between taxable-with-ITC and taxable-without-ITC and claim proportionate input tax credit. Whether a cab service provider may apply the higher GST rate with Input Tax Credit for some corporate recipients and the lower GST rate without Input Tax Credit for others, and whether Input Tax Credit can be claimed proportionately based on the proportion of supplies billed under each option; the issue involves the relationship between chosen billing rate for particular supplies, allocation of ITC entitlement, and any reverse-charge implications for corporate recipients.