A CAB OPERATOR RUNNING THEIR CAR UNDER REVERSE CHARGE AS WELL AS UNDER FORWARD CHARGE ALSO. PLEASE CLARIFY WITH SECTION NO.

Reply—The services provided by way of renting of a motor vehicle provided to a body corporate by a person other than a body corporate, where the cost of fuel is also included in the consideration charged (and GST is charged at 5%), is required to comply with the RCM requirements of section 9(3) of the CGST Act vide Notification 22/2019-Central Tax (Rate) dated 30.09.2019 [NN 22/2019-CTR] with effect from 1-10-2019.

By Notification No 29/2019-Central Tax (Rate) dated 31.12.2019 [NN 29/2019-CTR], the above has been amended to provide that any person, other than a body corporate who supplies the service to a body corporate, and does not issue an invoice charging central tax at the rate of 6 %, to the service recipient such body corporate located in the taxable territory would get covered by RCM provisions.

However, one need to know about the difference between renting of motor vehicle and transport of passenger’s service and rent a cab services before determining the applicability of RCM.