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GST on Tempo used for Transport

Dileep (Accountant) (82 Points)

19 December 2019

I am Distributor of various companies. I have made a Yearly Contract with Tempo Owner under which I am provided a tempo by tempo owner and I pay for tempo related Diesel, Driver & tempo repair under this contract for for using it for Transport of my goods which are sold by me.

Under this contract, I make a Lumpsum yearly payment to Tempo provider on 31st of March each year after deducting TDS as Contractor. I use tempo for transport of my goods to various dealers.Tempo goes each day with proper invoices raised on dealers.

Tempo provider is NOT registered under GST. Since there is a contract with tempo owner as above, Goods Consignment notes are NOT generated.

Will his contract attract GST under RCM ? If yes then what % of GST ? and whether I can take Input credit if GST is payable

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3 Replies

narendra (Accountant) (275 Points)
Replied 19 December 2019

The service will be covered under renting of Motor Vehicle.

W.e.f. 1-Oct-2019, vide Notification No. 22/2019 of CGST (Rates), this type of service is inserted under Sl. No. 15 and it attracts reverse charge u/s 9(3), if the same is provided to a "body corporate" (i.e. a company or an LLP).

narendra (Accountant) (275 Points)
Replied 19 December 2019

One more condition for applicability of reverse charge in above case is that the supplier of motor vehicle on rental basis should NOT be a "body corporate".

So, if the supplier is also a "body corporate", then it will NOT attract reverse charge.

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 20 December 2019

No RCM is not applicable.

If tempo service provider do not issue bilty (GR) that means he is not a GTA , hence the service provided by tempo owner is exempted in term of Notification 12/2017 CT (r)