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Applicability of reverse charge mechanism
RCM is applicable on Renting of motor when the Supplier of service is not an body corporate & have opted to pay GST on FC @ 5% without ITC & the Recepeint of Services is an Body corporate .
And if Supplier has opted to pay GST @ 12% then no rcm is applicable , intact Receptient can claim ITC for the same.
(for details can refer Circular 130/49/2019 GST)
Hello,
To bring in greater clarity, serial No. 15 of the notification No. 13/2017-CT (R) dated 28.6.19 has been amended vide notification No. 29/2019-CT (R) dated 31.12.19 to state that RCM shall be applicable on the service by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient only if the supplier fulfils all the following conditions:–
(a) is other than a body-corporate;
(b) does not issue an invoice charging GST @ 12% (6% CGST + 6% SGST) from the service recipient; and
(c) supplies the service to a body corporate.
To Conclude:
Service Provider is Corporate Entity-No RCM
Service Recipient is Other Than Corporate Entity-No RCM
Hope Your Doubt will clear now..
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