Notification No. 29/2019 - Central Tax (Rate) Explained

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Notification No. 29/2019 - Central Tax (Rate): To amend notification No. 13/ 2017- Central Tax (Rate) so as to notify certain services under reverse charge mechanism (RCM) as recommended by GST Council in its 38th meeting held on 18.12.2019.

GST: [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GSR......(E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.13/2017- Central Tax (Rate), dated the 28^th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 692(E), dated the 28^th June, 2017, namely:-

In the said notification, in the Table, for serial number 15 and the entries relating thereto, the following shall be substituted, namely: -

(1)	(2)	(3)	(4)
“15	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.	Any person, other than a body corporate who supplies the service to a body corporate and does not issue an invoice charging central tax at the rate of 6 per cent. to the service recipient	Any body corporate located in the taxable territory.”.

(Ruchi Bisht)
Under Secretary to the
Government of India

Note: -The principal notification No. 13/2017 - Central Tax (Rate), dated the 28^th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 692 (E), dated the 28^th June, 2017 and was last amended by notification No. 22/2019 - Central Tax (Rate), dated the 30^th September, 2019 vide number G.S.R. 737(E), dated the 30^th September, 2019.

📚 Frequently Asked Questions (FAQs): Notification No. 29/2019 - Central Tax (Rate)

Q1: What is Notification No. 29/2019 – Central Tax (Rate)?

Answer:
Notification No. 29/2019 – Central Tax (Rate) amends Notification No. 13/2017 to modify RCM provisions for renting of motor vehicles to body corporates, particularly where fuel cost is included in the consideration.

Q2: From which date is Notification No. 29/2019 applicable?

Answer:
The notification is effective from 31 December 2019.

Q3: Which section of GST law governs this RCM change?

Answer:
This RCM amendment is notified under Section 9(3) of the CGST Act, 2017, which allows the Government to shift tax liability to the recipient.

Q4: Which service is specifically covered under this notification?

Answer:
Renting of any motor vehicle designed to carry passengers, where:
Fuel cost is included in the consideration, and
Service is provided to a body corporate.

Q5: Who is liable to pay GST under RCM after this amendment?

Answer:
The body corporate (service recipient) is liable to pay GST under RCM if the supplier does not charge GST @ 6% in the invoice.

Q6: Who is the supplier covered under this RCM entry?

Answer:
The supplier must be:
Any person other than a body corporate, and
Supplying vehicle rental services to a body corporate.

Q7: What happens if the supplier charges GST @ 6% in the invoice?

Answer:
If the supplier charges GST @ 6% (CGST 6% + SGST 6%), then:
RCM does not apply, and
Supplier pays GST under forward charge.

Q8: Can you explain this with a real-life example?

Answer:
Yes 👍
📌 Example:
A cab operator (individual/firm) rents cars to an IT company, including fuel cost.
If cab operator does NOT charge GST @ 6% → IT company pays GST under RCM
If cab operator charges GST @ 6% → Cab operator pays GST under forward charge

Q9: Is GST paid under RCM eligible for Input Tax Credit (ITC)?

Answer:
Yes ✅. GST paid under RCM is eligible for ITC, subject to Section 16 of the CGST Act, if used for taxable business supplies.

Q10: How should GST under RCM be paid?

Answer:
GST under RCM must be:
Paid in cash (ITC cannot be used for payment), and
Reported in Table 3.1(d) of GSTR-3B.
👉 File accurate RCM returns with Finodha:
🔗 https://finodha.in/gst-return-filing/

Q11: Does this RCM apply to renting of goods vehicles?

Answer:
No ❌. This entry applies only to motor vehicles designed to carry passengers, not goods vehicles.

Q12: Is GST registration mandatory for suppliers under this RCM entry?

Answer:
No. Suppliers are not required to take GST registration solely because they supply services covered under RCM.

Q13: How does this notification impact corporate compliance?

Answer:
Companies must:
Identify RCM-covered vehicle rentals
Pay GST under RCM correctly
Maintain RCM documentation
Claim eligible ITC properly
👉 Avoid RCM errors with Finodha GST Experts:
🔗 https://finodha.in/gst-compliance/

Q14: What are the risks of non-compliance with this notification?

Answer:
Non-payment or wrong payment may lead to:
Interest under Section 50
Penalty under Sections 73 or 74
GST notices and audits

Q15: Who should carefully review Notification No. 29/2019?

Answer:
This notification is crucial for:
Companies hiring cars/buses
IT, BPO, manufacturing firms
Transport contractors
Corporate HR & admin teams
👉 Get expert RCM review from Finodha:
🔗 https://finodha.in/gst-compliance/

Conclusion✅:

Notification No. 29/2019 – Central Tax (Rate) shifts GST responsibility in vehicle rental transactions and places greater compliance responsibility on body corporates.

📌 Key takeaway:
If fuel is included and supplier doesn’t charge 6% GST → RCM applies.

👉 Stay compliant and audit-ready with Finodha GST Professionals
🔗 https://finodha.in/gst-compliance/

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