# RCM on Renting of Motor Vehicles – Entry 15

## The Entry

Supplier	Service	Recipient
Any person (other than a body corporate) who does NOT issue an invoice charging CGST @ 6% (i.e., 12% total) to the service recipient	Renting of any motor vehicle designed to carry passengers, where cost of fuel is included in consideration	Any body corporate located in TT

So RCM applies when ALL of the following are true:

1. Supplier is not a body corporate.

2. Recipient is a body corporate located in TT.

3. Motor vehicle is designed to carry passengers.

4. Cost of fuel is included in consideration.

5. Supplier has NOT charged 12% under forward charge.

## Two Rate Options for Supplier

Rate	ITC Position for Supplier	RCM?
5% (2.5% CGST + 2.5% SGST or 5% IGST)	Only limited ITC of input services in the same line of business	RCM applies (recipient pays)
12% (6% CGST + 6% SGST or 12% IGST)	No restriction — full ITC available on inputs & input services used in the service	Forward charge by supplier

## Clarification — Cir. No. 177/09/2022-GST dt. 03.08.2022

The two services below are distinct headings in the Service Tariff:

### (i) Renting of Motor Vehicles Designed to Carry Passengers

Vehicle is rented for a period of time.
Renter (recipient) defines how/when the vehicle is operated — schedules, routes, operational decisions.
Falls under Entry 15 → RCM applicable subject to conditions.

### (ii) Passenger Transport Services

Services provided over pre-determined routes on pre-determined schedules.
This is NOT renting of motor vehicles.
Entry 15 (RCM) is NOT applicable.

## Application of the Clarification

A body corporate hires a vehicle to transport its employees daily (it decides timing/route) → Renting → RCM under Entry 15.
A body corporate buys bus tickets / books cabs for a one-off specific journey on a fixed route → Passenger transport service → NO RCM.

Worked example

### Example 1

Example 1 (RCM @5%): A proprietor (non-body corporate) rents a cab with fuel cost included to ABC Pvt Ltd for transporting its employees. He charges 5% on the invoice. ABC pays GST @ 5% under RCM.

### Example 2

Example 2 (Forward charge @12%): Same proprietor opts for 12% and clearly mentions on invoice. He pays GST under forward charge; ABC pays only the consideration plus 12% GST. No RCM.

### Example 3

Example 3 (Body corporate supplier): A rent-a-cab Pvt Ltd company supplies the same service. Since supplier is a body corporate, RCM does NOT apply — forward charge.

### Example 4

Example 4 (Passenger transport): ABC Pvt Ltd books a ride for an executive to airport for a one-time predetermined route — Passenger transport service, NOT renting. No RCM.

⚠️ Common exam mistakes

Charging RCM when the supplier is a body corporate or when supplier has charged 12% on invoice.
Treating predetermined passenger transport (e.g., shared cab/taxi for one-time use) as renting — leading to wrongful RCM.
Forgetting the condition 'cost of fuel included in consideration' — if vehicle is rented without fuel, Entry 15 may not apply in the same manner.
Confusing the supplier's limited ITC restriction (at 5%) with the recipient's ITC eligibility on RCM tax paid.

Reference: Entry 15 — Notification No. 13/2017-CTR dated 28.06.2017 (as amended); Circular No. 177/09/2022-GST dated 03.08.2022

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RCM on Renting of Motor Vehicles (Entry 15) & Passenger Transport Distinction

Worked example

⚠️ Common exam mistakes