Reverse charge of gst on freight

RCM 530 views 17 replies

amjad

accountant

45 Points Joined August 2011

I RENTED A VEHICLE ON RENT, I PAID HIM RS 6000 PER DAY FOR DIESEL AND RS 6000 FOR HIS SERVICE CHARGE, ON WHICH AMOUNT GST (5%) UNDER REVERSE CHARGE WOULD BE CHARGED.

WHETHER ON RS 6000 PAID FOR SERVICE, AS DIESEL IS NOT THE SERVICE CHARGE OR

ON RS 12000/- AS IT IS MY TOTAL EXPENDITURE TOWARDS THAT RENT OF VEHICLE, WHETHER I PAID IT IN THE TERMS OF DIESEL OR IN THE TERMS OF SERVICES.

NOTE: I DIDN'T PURCHASED DIESEL FROM PETROL PUMP, I PAID IT DIRECTLY TO THE CONTRACTOR.

HOPE TO GET RESPONSE FROM PROFESSIONALS SOON.

Replies (17)

CA Shivam Arora

Chartered Accountant

2414 Points Joined November 2016

GST to be charged on total of 12000. You cannot escape tax by breaking the amount into several components. To break it in various components and infer it to be a distinct service does not seem to be the intention of the law

Vivek Kumar

Accountant

118 Points Joined September 2015

GST TO BE CHARGED on 12000.

RAJA P M

"Do the Right Thing...!!!"

128111 Points Joined January 2015

Originally posted by : amjad

I RENTED A VEHICLE ON RENT, I PAID HIM RS 6000 PER DAY FOR DIESEL AND RS 6000 FOR HIS SERVICE CHARGE, ON WHICH AMOUNT GST (5%) UNDER REVERSE CHARGE WOULD BE CHARGED.

- Rs. 12000 is Your Expenditure. But., As per your query the Transporter is not GTA. So, RCM not applicable from 13th Oct-2017 to 30th June-2018. No need to pay Tax under Reverse Charge Basis...

WHETHER ON RS 6000 PAID FOR SERVICE, AS DIESEL IS NOT THE SERVICE CHARGE OR
ON RS 12000/- AS IT IS MY TOTAL EXPENDITURE TOWARDS THAT RENT OF VEHICLE, WHETHER I PAID IT IN THE TERMS OF DIESEL OR IN THE TERMS OF SERVICES.

- Your Expenditure is Rs. 12000. He (transporter) can use the amount anyway. You want his service only. That's all

NOTE: I DIDN'T PURCHASED DIESEL FROM PETROL PUMP, I PAID IT DIRECTLY TO THE CONTRACTOR.

- These total amount will be book under your expenditure head. So, Simple.

HOPE TO GET RESPONSE FROM PROFESSIONALS SOON.

- I think Your doubt is cleared...?!!!

CA Shivam Arora

Chartered Accountant

2414 Points Joined November 2016

What if the service provider is engaged in car hiring service on which RCM is applicable

RAJA P M

"Do the Right Thing...!!!"

128111 Points Joined January 2015

From the purview of Service provider, GST on Rent-a-cab is 5% without ITC benefit and 12% with ITC benefit.

As per Section 9(5) of the CGST Act, Radio taxi or passenger transport services provided through electronic commerce operator to any person shall be taxable under Reverse Charge Mechanism to be paid by E-commerce operator like Ola, Uber etc.

Besides to this, Following services of transport of passengers by road are exempt from GST:-

(a) Non-air conditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, character or hire

(b) Transport of passengers in metered taxi or auto rickshaws (including e-rickshaws).

Also Check out the SAC - 9964

CA Shivam Arora

Chartered Accountant

2414 Points Joined November 2016

Yes the ques can be related to rent a cab service

RAJA P M

"Do the Right Thing...!!!"

128111 Points Joined January 2015

Please refer this article can get some clarity...

https://cleartax.in/s/gst-impact-on-cabs

CA Shivam Arora

Chartered Accountant

2414 Points Joined November 2016

OK RCM is not applicable in this case. I got it. Thank you !

amjad

accountant

45 Points Joined August 2011

Ok... Thanks a lot Sir.

RAJA P M

"Do the Right Thing...!!!"

128111 Points Joined January 2015

You are welcome...

amjad

accountant

45 Points Joined August 2011

What if I am purchasing diesel from Petrol Pump for my own vehicles as well as for rented vehicles, then would cost of diesel be included for calculating 5% GST under RCM or not.

If included then how we will calculate the part of that particular vehicle?

CA Shivam Arora

Chartered Accountant

2414 Points Joined November 2016

RCM is not applicable in your case as correctly pointed out by Mr. Raja PM. However, consideration includes something given in exchage which carries monetary value(barter system). Therefore, tax to be charged on total amount including diesel.