Introduction: This article discusses in detail about the GST taxability on renting of residential property by one business entity to another business entity.

Q1. Whether renting of residential property by one company to another company to be used by its Managing Director for residential purposes is liable to GST or not?

Ans.  As per entry no. 12 of notification no. 12/2017- Central Tax (Rate) dated 28th June 2017, Services by way of renting of residential dwelling for use as residence are exempted from levy of GST without any conditions or restrictions.

So in view of the above it may be construed that renting of residential property only for residential purposes is exempted from levy of GST even if it is provided by one business entity whose main business is to let out residential property only for residential property.

Such services may be provided to a individual or to a company for residential uses by its employees without attracting any levy of GST on rental amount.

However, such exemption is not available, if:

  1. Such residential property is used for commercial purposes;
  2. Such residential property is used for guest house purposes by tenant or its employees.

The author is a practising CA and is registered Insolvency Professional. He can be reached at [email protected] , Mob. +91 9953587496.

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  1. Harshank Patel says:

    I Have 10 flats and want to rent them to students for staying, will it be counted as hostel.? Will I have to pay GST on the rent for the same.? If I form a company and rent the same, will the scenario remain same.?

  2. manoj mehta says:

    i am an indivual and have rented an apartment with 12 dwellings to oyo life . They run PG accomodations in that apartment. Do we need to pay GST on it
    It is co ownered property and one owner also has his own business

  3. Gaurav Gupta says:

    Thanks for this nice article.
    Please clarify, if a Landlord gives a residential dwelling to a Hostel Co. on rent, which is further given on annual rental to students for RESIDENTIAL USE by the Hostel Co., whether Landlord needs to charge GST or not ?

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September 2021