GST on renting of motor vehicle

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This discussion clarifies the Goods and Services Tax (GST) implications when a company receives an invoice for motor vehicle rental from an individual supplier registered under GST. While an individual supplier might be registered, they generally cannot issue an invoice without GST. For services like cab hire, GST is often payable under the Reverse Charge Mechanism (RCM) by the recipient company, and input tax credit for cab hire is typically blocked under Section 17(5) of the GST Act.

Lalit Nyati

Lalit Nyati (Querist)
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18 February 2020 Hello, if a company receive a invoice from an individual (service provider) who is registered under GST (Regular) with 18% (9%+9%) GST.

In this case any benefit to company receive an invoice without GST (as per notification 01.10.2019) and pay GST under RCM?
Is there any law compliance in future if receive invoice with GST?

Thanks

CA Anita Bhadra

CA Anita Bhadra (Expert)
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18 February 2020 An individual supplier has to charge 5% to the Company.
The Company can not take benefit as Cab Hire is blocked credit under Sec 17(5)

Lalit Nyati

Lalit Nyati (Querist)
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18 February 2020 But in this case individual is registered under GST, Can he issue invoice without GST & company will pay GST 12% (6%+6%).

CA Anita Bhadra

CA Anita Bhadra (Expert)
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18 February 2020 The individual will not charge GST, instead, he will mention in the invoice - GST payment will be made by the recipient under RCM

Gokul Sharma

Gokul Sharma (Expert)
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18 February 2020 REGISTERED PERSON CANNOT ISSUE INVOICE WITHOUT GST.

CA Anita Bhadra

CA Anita Bhadra (Expert)
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18 February 2020 For RCM, a Registered person will issue the invoice without adding GST ( He will mention the RCM GST amount in the inner column of the invoice.

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