Renting of cab under GST

Hi Roshni,

Here's the clarity on the renting of cab under GST in ABC’s case:

1. Separate Registration for Multiple Services?

• GST registration is based on PAN and state, not on specific services.

• If ABC is registered under GST for construction services, that registration covers all taxable supplies made by ABC in that state.

• There is no need for separate GST registration for renting of cab service if both services are in the same state.

2. Renting of Cab Services and GST:

• Renting of cab services is a taxable supply under GST.

• If ABC is providing cab rental services, they should charge GST on that service unless it is covered under Reverse Charge Mechanism (RCM).

3. Body Corporate Paying GST under RCM:

• Certain cab rental services are covered under RCM, meaning the recipient (body corporate) pays GST, not the supplier.

• According to GST law, renting of cab services to body corporates where the body corporate is registered under GST and uses the cab for business is under RCM.

4. Invoice Without GST Charge:

• ABC can raise an invoice without GST, but must mention that GST is payable under Reverse Charge Mechanism by the recipient.

• The invoice should clearly state something like:
  “GST to be paid by recipient under Reverse Charge Mechanism as per Notification XYZ.”

5. Is It Fraud?

• Not disclosing renting service as a business activity during GST registration can be problematic, but

• Not charging GST on cab rental invoices to body corporates, when GST is payable under RCM by recipient, is not fraud.

• However, ABC should disclose all services they provide to the GST authorities if asked during audit or compliance checks.

• ABC must keep proper records and comply with GST return filing correctly.

Summary:

If ABC wants to be fully compliant, it's best to inform GST authorities about all services provided during filing of returns or through amendments.