GST ON RENT A CAB SERVICE

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This query is : Resolved

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This discussion clarifies the Goods and Services Tax (GST) on rent-a-cab services provided by individuals to private limited companies. The consensus is that GST is payable under the Reverse Charge Mechanism (RCM), meaning the company receiving the service should pay the tax directly, not the service provider. If the RCM tax wasn't paid in the original tax period (e.g., March) and is paid later (e.g., June), interest may be applicable if it's beyond 60 days from the invoice date.

santosh

santosh (Querist)
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16 July 2020 Hi

we are private limited company, we had taken a rent a cab service from a individual with tax charged @ 5% cgst-2.5%, Sgst-2.5%, but the service provider has charged tax in the invoice and not mentioned that " tax is payable under reverse charge mechanism, my doubt is whether we have to pay the TAX as RCM or we shall pay the entire bill amount including the tax to the service provider since service provider has not mentioned as rcm payable and charged the tax in the invoice, please clarify me.

Thanks & Regards
Santosh

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 July 2020 You have to pay GST under RCM. Pay bill without tax.

santosh

santosh (Querist)
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16 July 2020 Thank you so much seetharaman sir, another doubt is if the bill is relating to March 20 month and we had not paid in March 20 GSTR3B and we are paying with June 20 month GSTR3B, then we have to pay interest on this RCM also or not.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 July 2020 Yes interest payable beyond 60 days from the date of invoice.

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