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Pankaj Rawat (GST Practitioner) 21 January 2020
RCM is Applicable :
In term of Notification 22/2019 CT (R) , read with Circular 130/49/2019, following conditions prescribed:
1Receptient should be Body corporate.
2. Supplier shall be other than body corporate & opted scheme of 5% GST with limited ITC.
If both the above conditions is fulfilled, RCM is applicable.
Pankaj Rawat (GST Practitioner) 22 January 2020
There is only 2 rates prescribed as Replied by me above ,
1. 5% without ITC >> RCM applicable
2. 12 with ITC >> RCM not applicable.
Note : Any one of above rate is can be excersis by Tax Payer at beginning of FY & need to carry it till end of Fy
sidhu (Tax consultant) 22 January 2020
Hi Jithendra Chary,
As mentioned by Pankaj sir above, the rate of tax to be adopted by the supplier of 'renting of motor vehicles' services shall either be 5% or 12%, irrespective of the recipient goods (5%/12%/18%/other)
Example 1: In case A an individual (supplier of renting services) charges Company B Ltd (being recipient of services). A opts to charge 12% rate of GST, then RCM is not applicable.
Example 2: In case A an individual (supplier of renting services) charges Company B Ltd (being recipient of services). A opts not to charge GST in the bill, then B ltd would be mandated to pay RCM @ 5%.
However, in the best interest the exporting Companies may push the small GTA service providers to opt for 5% rate and not to charge GST in the bill to save their working capital.
Hope the above clarifies.