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GST TAX SLAB ON RENT A CAB

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ING78

Manager

92 Points Posted on 29 June 2025

Please advise the GST rate applicable under below scenerio, and advise if RCM also applicable.

if proprietorship firm, receive a car rental services from GST un-registered vendor, at what rate of GST that proprietorship firm charge to the end client (corporate or individual)?
is there any liability for the RCM?

Thank you,

Replies (5)

Quick Summary

This discussion clarifies the GST rate applicable to car rental services provided by unregistered vendors to proprietorship firms. The applicable GST rate is 5% (CGST/SGST) or 5% IGST for inter-state transactions, as car rentals fall within this tax slab. Importantly, Reverse Charge Mechanism (RCM) is applicable in this scenario. The thread also touches upon potential TDS implications under sections 194I or 194C and briefly considers scenarios involving entities other than proprietorship firms.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 30 June 2025

GST Rate on Car Rental Services:- If a propritorship firm receives car rental services from a GST unregistered vendor, the GST rate applicable would be 5% (2.5% CGST + 2.5% SGST) or 5 % IGST if it is an interstate transation. This rate is applicable because car rental services fall under the 5% GST slab.

Regarding RCM, yes, there is liability for RCM in this scenerio.