Changes in GST Rate on Rent a Cab Services w.e.f. 20-10-2023:

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.