RCM Renting a Motor vehicle 1-10-19

This query is : Resolved

P.Harish (Querist)
Follow

04 October 2019 Dear Expert,
Notification No 22/2019 Centre Tax is issued on 30th September19 & imposed RCM on few services Rental a motor vehicle is one of them. We are in doubt about description in column no 3. No doubts recipients is Body corporate.
What is its meaning?
On What % & when it will be levied?
Kindly brief its conditions laid down in the Notification

Thanks
G Harish

CA Ashwini Seeram

CA Ashwini Seeram (Expert)
Follow

04 October 2019 Renting of motor vehicle has been included under reverse charge mechanism only if it is provided TO a body corporate BY a non-body corporate and the supplier (Non-body corporate) opts for 5% rate. The applicable rate is 5% on the value charged (which should be inclusive of fuel cost). In other cases liability under RCM will not exist for renting of motor vehicle(i.e. where fuel cost is not part of the consideration for the supply).

P.Harish

P.Harish (Querist)
Follow

04 October 2019 Thanks Ashwini Ji for reply. Again questions is arrive, Say
1) Mr X - Unregistered- provided vehicle to Body corporate on monthly rent , what % wiil be. for RCM (a) fuel by Body corporate (b) fuel by Mr X

2) Mr Y - Registered- provide Car to Body corporate & charged GST @5% in the Bill . What wiil be RCm rate .
Kindly elaborate
Thanks

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
Follow

20 July 2025 1. What does “recipient is Body Corporate” mean?
In GST, “Body Corporate” means any company or corporation established by law (like Pvt Ltd, Ltd, LLP, government companies, statutory corporations, etc.).
So, RCM on renting of motor vehicle applies only when the recipient of the service is a Body Corporate.
If you are a registered company (Pvt Ltd, Ltd), you come under this category.
If you are a sole proprietor or partnership firm, this RCM does not apply to you for renting of motor vehicle.
2. On What % is RCM levied for renting motor vehicle?
The RCM rate is 5% CGST + 5% SGST = total 10% GST on the amount paid for renting the motor vehicle.
This is notified under Notification No. 22/2019 (and corresponding SGST notifications by state governments).
Note: The tax rate is 5% CGST + 5% SGST for intra-state supply; for interstate, 10% IGST.
3. When will RCM be levied?
The RCM is applicable from 1st October 2019 onwards.
You have to pay GST on reverse charge basis when you receive renting services of motor vehicle from an unregistered person or a registered person who is exempted or when specified under the notification.
This means if you receive the service of renting motor vehicle from an unregistered supplier (like an individual or unregistered firm), you as a Body Corporate need to pay GST under RCM.
If the supplier is registered and charges GST on invoice, then no RCM is applicable.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now