Rental income beyond Rs 20 lakh to attract GST @18%

Rental income from residential property has been exempt from GST but earning over Rs 20 lakh annually from renting or leasing for commercial purposes would attract the levy, so house property is let-out for shop or office or for commercial purposes, no GST will be levied up to Rs 20 lakh. The taxpayer earning more than the exempted threshold will have to register with the GST Network and pay taxes. 

As per the rates notified by the Government as approved by the GST Council specifically exempts services by way of renting of residential dwelling for use as a residence.

Hence, it does not exempt renting of immovable property for commercial, shop or office purposes.

Accordingly, the same is taxable at 18% GST,

It was clarified that “GST is leviable only if aggregate turnover is more than 20 lakhs. (Rs. 10 Lakhs in 11 Special category States) For computing aggregate supplies, turnover of all supplies made by you would be added.”

As per GST Law, No GST is payable on Services by a person by way of renting of precincts of a religious place meant for general public. So the rate of GST payable on Services by a person by way of renting of precincts of a religious place meant for general public is Nil rated.

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  1. Preeti says:

    If I am earning more than 20lakhs from renting, out of which only 2.5lakhs from commercial property and rest from residential then if this will attract gst

  2. Adiraj jain says:

    In case commercial property is taken on rent for business Perpose from a company have registered under gst act in two state and co want to rent agreement with other state branch, both are registered in gst act it possible in gst act

  3. Vishal Jain says:

    We have taken school building for CBSE school on lease from central government.The rental is below 20 Lacs.
    Do we have to pay GST ???
    Can you please give GST notification for 20 Lacs limit exemption ??
    Thanks a lot..

    1. CA Ankit Kumar says:

      Dear Mr. Gupte,

      To my understanding, use of RESIDENTIAL property as a residence is exempt from GST. In your case nurses use the property for residence, thus there should be no GST implication. I assume the property to be residential in nature.

      This is my personal opinion, please seek profession advice from consultant.

  4. SIGNEXCEL says:

    Mr. Sudesh, if only for the rent contract you do not need to register but if you ask for contractor in this situation no need to register. But if he has any other business through same PAN crossed the limit of aggregate (including of all business) turnover of Rs. 20 lac then he should register in GST otherwise not.

  5. SUDESH SHARMA says:

    My organization is registered under 12 AA of the Income tax act, educational purpose & has given canteen contratc. The approximate rent is rs 6000/-p.m. does this fall under GST & do we have to register & pay gst or the contracter has to register & pay gst. i think this is exempted as above.
    Thanks & Regards

  6. CA Ankit Kumar says:

    My opinion

    In case residential property is taken on rent by person registered under GST, the recipient will have to pay GST on reverse charge basis.

    Use of residential property for residence is exempt but use of residential property for commercial purpose is not exempt.

    Being a taxable service, recipient will have to pay GST on reverse charge of the service provider is unregistered.

    Threshold of Rs.20 L does not available under reverse charge.

    Please share your views.

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November 2020