Question: Whether rent a cab service and renting of motor vehicle is not liable for reverse charge and only metered cab is liable for reverse charge?
Answer: Reverse charge is applicable in terms of section 9(3) read with Notification No. 13/2017-CT(R). In the said Notification, entry No. 15 provides for reverse charge liability in case of 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, provided to a body corporate. The difference between services of transportation of passenger by motor vehicle and renting of motor vehicle is very bleak and thus, the whole confusion persists. But on examination of Annexure to Notification No. 11/2017-CT(R) one shall find that Taxi services including radio taxi and other similar services are classified under Local transport and sightseeing transportation services of passengers and not as services of renting of motor vehicle. Thus, metered cabs and taxis would not fall within the ambit of reverse charge. The other cabs which are acquired on rent shall be (subject to conditions provided in the entry) be exigible to GST under reverse charge
