Rcm om vehicle hire charges

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Anand Gudi

25 Points Posted on 23 June 2017

We are a logistics company and hire Goods Vehicles for Local and outstation movements of our Customers Cargo to be sent by Rail/Air Cargo or road. Since the Individual vehicle owners are below the threshold limit as per GST rules, will they be treated as exempted category or unregistered persons. 2. Since our services are Door to Door pickup and delivery, our services come under Courier agency as well as GTA and our Customers are charged a comprehensive rate which includes pickup, loading unloading, clearance and delivery charges at the delivery point. Under GST we will either charge 18% GST for Courier charges and 5% for GTA services. My query is what happens to the RCM paid by us on Vehicle hired by us.

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Mahendra

Chartered Accountant

114 Points Posted on 23 June 2017

If the vehicle is hire for GTA purpose then the transaction is exempted from GST (refer Sr.No.21(B)), so there will be no RCM. On output However if the same is hire for courier purpose, then it will be liable for tax under forward charge, where vehicle owner is liable to charge tax, if such vehicle owner is under threshold limit, then u have to pay GST under RCM which will be available as credit against GST liability of courier.