RCM on Rent a cab

Sir, this Notification create more confusion, I would like to highlight some issue which need to be answered.

As per sr.no 15 of Not.22/2019-CTR, RCM shall be applicable to persons other than body corporate paying central tax at the rate of 2.5 percent on renting of motor vehicle with input tax credit only if input service in same line of business to any body corporate located in taxable category.

1) From above can it be concluded that non body corporate paying tax CTR 2.5 without availing ITC is excluded from RCM.
In my view certainly this may not be intension but need more clarity.

2) Does it mean RCM not applicable for unregistered person as 2.5 percent CTR slab is mandatory.

In my view answer is Yes, as persons paying tax in this slab is registered person.

3) Does it applicable to persons who voluntary take registration though total turnover does not exceed threshold limit and paying CT 2.5 percent.

In my view answer is Yes as it is applicable to those non body corporate who are paying CTR at the rate of 2.5 percent.

4) In case such unregistered person as mentioned above withdraw registration after 1oct but was paying tax 2.5 percent earlier to 1oct 19, would it mean they falls under RCM
In my view RCM not applicable to such persons but need more clarity


5) Does it applicable to persons who voluntary take registration though total turnover does not exceed threshold limit and paying CT 6 percent to take advantage of ITC.

In my view answer is No, as it is applicable to those non body corporate who are paying CTR at the rate of 2.5 percent only.

views expressed are personal only.

Pankaj Sharma

Pankaj Sharma 16/10/2019