The government has no plans to roll back the 18% GST on leased properties, which has been in place since GST’s introduction in 2017. The GST Council, in its 54th meeting, recommended shifting the tax on non-residential property leases from forward charge to reverse charge basis. However, concerns arose regarding the financial burden on composition taxpayers, who cannot claim input tax credit. In response, the 55th GST Council meeting on December 21, 2024, recommended excluding composition taxpayers from this requirement. Consequently, Notification No. 07/2025-CT(R) was issued on January 16, 2025, exempting them from reverse charge obligations on leasing services received from unregistered persons. The Central Government does not maintain nationwide data on leased properties.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
STARRED QUESTION NO. *91
TO BE ANSWERED ON MONDAY, FEBRUARY 10, 2025
IMPACT OF GST ON LEASED PROPERTIES
*91. SMT. SAJDA AHMED:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government has any plan to roll back imposition of GST on leased properties as it gives the financial burden on tenants and property owners;
(b) whether the Government has conducted any studies or consultations to assess the economic impact of GST on leased properties, if so, the details thereof; and
(c) the steps taken by the Government to survey and maintain accurate data on leased properties across the country?
ANSWER
MINISTER OF FINANCE
SHRIMATI NIRMALA SITHARAMAN
(a), (b) and (c): A statement is placed on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO THE LOK SABHA STARRED QUESTION NO. 91 RAISED BY SMT. SAJDA AHMED FOR 10TH FEBRUARY, 2025 ON IMPACT OF GST ON LEASED PROPERTIES
(a) and (b): GST rates or exemption is prescribed based on the recommendation of the GST Council, which is a constitutional body having representatives of both Centre and States. GST is leviable on renting/leasing of property @ 18% since the introduction of GST in 2017. GST Council in its 54th meeting had recommended bringing the levy of GST on renting/leasing of non- residential (commercial) property under reverse charge basis. Earlier this was taxable under forward charge basis. Accordingly, an entry at Sl. No. 5AB was inserted in Notification No. 13/2017-CT(R) dated 28.06.2017 vide Notification No. 09/2024- CT(R) dated 08.10.2024 . Later on it was represented that this change is causing additional burden on registered assessees who have opted for Composition Scheme, as they are not entitled to claim ITC of such GST paid.
Accordingly, the matter was deliberated in detail in 55th GST Council meeting held on 21.12.2024. The Council recommended that assessees working under composition levy should be excluded from the scope of Sl. No. 5AB of the Notification No. 13/2017-CT(R) dated 28.06.2017. Accordingly, Notification No. 07/2025 – CT(R) dated 16.01.2025 was issued to exclude composition taxpayers from the requirement of paying GST on reverse charge basis on such services of renting/leasing of immovable property received from unregistered persons.
(c) : The data about the properties leased across the country is not maintained by the Central Government.
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