CA Pratibha Goyal | Nov 2, 2023 |
Changes in GST Rate on Rent-a-Cab Services w.e.f. 20-10-2023
The following amendment has been made in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 by Notification No. 12/2023-Central Tax (Rate) dated 20-10-2023.
Supply of service by way of transportation of passengers by motor cab or renting of motor cab, where the cost of fuel is included attracts GST @ 5% or 12% without or with ITC respectively. wherever the GST is paid at the rate of 5%, the condition for availing ITC in same line of business is restricted to 5% even if input tax at the rate of 12%.
This has been Explained by following examples:
| A | Main Service Provider | |
| B | Input service Provider to A in the same line of business | |
| C; Unregistered | Customer of A | |
Example 1
| Particulars | Services provided by A to C | Services provided by B to C |
| Taxable Value | 1000 | 800 |
| GST Rate | 5% | 5% |
| GST on Output | 50 | 40 |
| ITC | ITC Allowed to A w.r.t. services provided by B= Rs. 40. ITC of Goods and service other than ITC of input service in the same line of business will not be allowed. | |
Example 2
| Particulars | Services provided by A to C | Services provided by B to C |
| Taxable Value | 1000 | 800 |
| GST Rate | 5% | 12% |
| GST on Output | 50 | 96 |
| ITC | ITC Allowed to A w.r.t. services provided by B= Rs. 40. ITC of Goods and service other than ITC of input service in the same line of business will not be allowed. | |
Example 3
| Particulars | Services provided by A to C | Services provided by B to C |
| Taxable Value | 1000 | 800 |
| GST Rate | 12% | 5% |
| GST on Output | 120 | 40 |
| ITC Allowed to A w.r.t. services provided by B= Rs. 40. ITC of Goods and service other than ITC of input service in the same line of business will be allowed in this case. | ||
Example 4
| Particulars | Services provided by A to C | Services provided by B to C |
| Taxable Value | 1000 | 800 |
| GST Rate | 12% | 12% |
| GST on Output | 120 | 96 |
| ITC Allowed to A w.r.t. services provided by B= Rs. 96. ITC of Goods and service other than ITC of input service in the same line of business will be allowed in this case. | ||
Note: ITC on Capital Goods is allowed to service provider (Mr. A or Mr. B) in all the cases.
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