RCM on vehicle renting services

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This discussion clarifies the applicability of Reverse Charge Mechanism (RCM) on services like hiring buses for staff tours and cars for travel. It explains that RCM applies when a body corporate receives motor vehicle renting services from a non-body corporate supplier, unless specific GST rates are charged. Additionally, it covers the applicability of TDS under Section 194C, with limits based on aggregate payments or single bill amounts, and details the eligibility for claiming Input Tax Credit (ITC) on these expenses.

SHYAM KRISHNAN K

SHYAM KRISHNAN K (Querist)

18 May 2022 IS the RCM applicable on following services received by us-
1. We have hire a bus for staff tour
2. Hire car for Traveling purpose

IS the TDS applicable on bus hire Charges exceeds prescribed limit U/S 194C

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

18 May 2022 1 RCM applicable.
2 RCM applicable.
Yes, TDS applicable.

CA Puja Sharma

CA Puja Sharma (Expert)

18 May 2022 Yes, TDS will be applicable if the aggregate of all bills/payment exceed Rs. 1,00,000 during the year or single bill amount exceeds Rs. 30,000

SHYAM KRISHNAN K

SHYAM KRISHNAN K (Querist)

18 May 2022 IS the TDS applicable U/S 194 C or 194 I

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

18 May 2022 TDS applicable under section 194C.

Udaya Chandran

Udaya Chandran (Expert)

19 May 2022 With reference to the Notification No. 22/2019- Central Tax (Rate) dated 30/09/2019

If the recipient being a body corporate located in the taxable territory receives the services of renting of motor vehicle from any person other than a body corporate who is paying GST @ 2.5% CGST & SGST each, the recipient has to pay GST under RCM.

> If the person who provides the services is a body corporate - No RCM
> If the person who provides the services is not a body corporate - RCM is applicable
> If the person who provides the services is not a body corporate and charges GST @ 6% or more CGST & SGST each - No RCM
> If the person who receives the services is a body corporate - RCM is applicable
> If the person who receives the services is not a body corporate - No RCM

Yes, TDS is also applicable as per the limits as prescribed in the Income Tax act.

SHYAM KRISHNAN K

SHYAM KRISHNAN K (Querist)

19 May 2022 IS there any restriction on claiming ITC on the same.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 May 2022 ITC can be claimed on bus hiring labour welfare expenses.
ITC can't be availed on car hiring it's blocked credit.

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