Clarification on gst rate on rent a cab service under forward charge

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Query on GST applicability for rent-a-cab services under forward charge and applicable rates. It was clarified that GST on cab services is generally 5%, but providers may opt for 12% with full ITC. In some cases where fuel costs are borne by the recipient, GST at 18% may apply depending on service structure.

sachin Alwadhi

sachin Alwadhi (Querist)

27 May 2023 Hi
one of client paying gst for rent a cab service under forward charges at 12% gst with full itc.First question can rent a cab operator pay gst under forward charge or not? second which gst rate is applicable for 12% or 18 % for rent a cab operator? Third under which conditions rent a cab operator need to pay gst under 18 % tax bracket?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

28 May 2023 GST rate on cab services is 5%. Although, service provider can opt to pay GST at rate of 12% and take benefit of availing full input tax credit.

While renting taxi services or motor cabs, the service recipient shall bear the fuel cost. For the availing the taxi services or motor cabs, GST shall apply at the rate of 18%.

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