Rcm under service received from hiring vehicle (car)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2017 We the company taken service from hiring of vehicle (Bolero, Innova etc Car) at Site to facilitate site staff to move from one location to other.

Now Service contract is monthly fixed Rent and Fuel cost born by the company @ average 10km/litre.

So above service considered in RCM or not ? Yes or No. which current provision / para. please.

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2018 Seek Expert Advice for above query

Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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10 July 2024 Yes, the service taken by your company from hiring of vehicles (such as Bolero, Innova, etc.) for facilitating site staff transportation would generally fall under the Reverse Charge Mechanism (RCM) under GST. Here's why:

**Applicable Provision:**
- The service of renting of motor vehicles designed to carry passengers, where the cost of fuel is included in the consideration charged from the service recipient, is covered under RCM.
- Notification No. 13/2017-Central Tax (Rate) dated 28th June 2017 as amended by Notification No. 22/2019-Central Tax (Rate) dated 30th September 2019 specifies services provided by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient, and hence it attracts RCM.

**Key Points:**
- **RCM Applicability:** As per the above notifications, if the cost of fuel is included in the consideration charged by the service provider (in this case, the vehicle rental service), then GST is payable under RCM by the recipient of the service (your company).
- **Fuel Cost Inclusion:** Since your contract includes the fuel cost at an average of 10 km/litre, this falls within the purview of the notification.

**Conclusion:**
Based on the information provided, the service of hiring vehicles where the fuel cost is included in the consideration charged to your company is indeed subject to GST under RCM. Therefore, you would need to pay GST under RCM for these services.

It's advisable to cross-check with your GST consultant or tax advisor for specific applicability and compliance requirements based on the exact terms of your service contract and any recent updates in GST regulations.

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