## RCM on Renting of Motor Vehicle (for Passengers)

### Scope

Applies only to renting of motor vehicle designed to carry passengers where:

Fuel cost is included in the consideration, and
It is a service of renting (not a passenger transport service)

### Distinction: Renting vs Passenger Transport

Feature	Renting of Motor Vehicle	Passenger Transport Service
Control	Recipient defines schedule & route	Pre-determined by supplier
Time	For a period of time	Per trip/journey
RCM entry applicability	Yes (subject to conditions)	No (different rules)

### Decision Tree

```

Renting of Motor Vehicle (passenger, fuel included)

+-------------------+

| |

Supplier is Supplier is

Body Corporate NOT Body Corporate

| |

FCM +--------+--------+

| |

Recipient is Recipient is NOT

Body Corporate Body Corporate

| |

+---------+---------+ FCM

| |

Tax rate 5% Tax rate 18%

(no full ITC) (with full ITC)

| |

RCM FCM

```

### Key Conditions Summarized

Supplier	Recipient	Rate opted by supplier	Mechanism
Body Corporate	Anyone	Any	FCM
Non-Body Corporate	Body Corporate	5%	RCM
Non-Body Corporate	Body Corporate	12% (18%* in source)	FCM
Non-Body Corporate	Non-Body Corporate	Any	FCM

### Key Takeaway

RCM is triggered only on the specific combination: non-body-corporate supplier → body-corporate recipient → 5% tax rate option.

Worked example

### Example 1

Example: Mr. Josh (individual, not body corporate) provides motor vehicle on rent (with fuel cost included) at 5% tax rate to:

BCG Ltd. (body corporate) for ₹ 5 lacs
RSA firm (partnership firm, not body corporate) for ₹ 2 lacs

Analysis:

₹ 5 lacs → RCM by BCG Ltd. (supplier non-BC, recipient is BC, rate 5%)
₹ 2 lacs → FCM by Mr. Josh (recipient is not body corporate)

⚠️ Common exam mistakes

Applying this RCM entry to passenger transport services (e.g., Ola/Uber-type per-trip services) - those follow ECO/separate rules
Applying RCM when fuel cost is excluded - the entry requires fuel cost to be included
Applying RCM when supplier is body corporate - body corporate suppliers always pay under FCM
Applying RCM on goods carriage rentals - this entry is only for passenger-carrying vehicles
Treating partnership firm as 'body corporate' - it is not

Bare-Act text Entry 15 of Notification 13/2017-CT(R) · Notification No. 13/2017-CT(R) dated 28.06.2017 · click to expand

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 by any person other than a body corporate, paying central tax at the rate of 2.5% on renting of motor vehicles with input tax credit only of input service in the same line of business - tax shall be paid on reverse charge basis.

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RCM - Renting of Motor Vehicle for Passengers

Worked example

⚠️ Common exam mistakes