5 GST on Rent A Cab

The information you heard is correct ¹. The GST Council recommended that services of renting vehicles supplied by non-body corporate entities to body corporate entities be brought under the reverse charge mechanism (RCM) ¹. The government has issued notification No. 22/2019-CT (R) dated 30.09.2019 to amend the parent RCM notification No. 13/2017-CT (R) dated 28.06.2017, which was issued under section 9(3) of CGST Act, 2017 ¹. Here are the conditions under which RCM will be applicable ¹: - The service provider/cab operator is a non-body corporate person (e.g., a proprietorship concern, HUF, or partnership firm). - The cab operator is unregistered or charges 5% GST in the bill without availing ITC. - The service recipient is a body corporate (e.g., a company, including a private limited company or corporation set under a separate statute). In such cases, GST will be paid by the service recipient (body corporate) on their own under RCM ¹. However, please note that RCM provisions are not applicable if the cab operator/service provider is a body corporate or charges 12% GST (normal rate under HSN Code 9964) with or without availing ITC ¹. Additionally, if the service recipient is not a body corporate (e.g., a proprietorship or partnership firm), RCM provisions will not apply ¹.