Reimbursement of Expenses to Pure Agent

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This discussion clarifies the applicability of Reverse Charge Mechanism (RCM) when a body corporate reimburses a pure agent for Rent-a-Cab services. It confirms that RCM is indeed applicable in this scenario. The reasoning is that the supply of the cab service is considered on a principal-to-principal basis between the body corporate and the cab service provider, making the body corporate liable to pay GST under RCM.

Vanisree P

Vanisree P (Querist)
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06 January 2020 Whether RCM is applicable if a body corporate pays to its Pure Agent , the amount which has been incurred by the pure agent for Rent a Cab service.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 January 2020 Yes RCM applicable on it.

Vanisree P

Vanisree P (Querist)
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06 January 2020 Sir,
RCM is applicable to the body corporate right

CA Anita Bhadra

CA Anita Bhadra (Expert)
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06 January 2020 Yes ,RCM is applicable.
When any supply takes place thru pure agent , The relationship between the supplier and recipient with respect to the main service, is on a principal-to-principal basis.
Therefore , GSt applicability between body corporate & cab service provider will be on principal to principal basis and body corporate availing services of cab hire is liable to pay GST on RCM

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