Up to 17th July, 2022, there was no GST on rent of residential property but after this date government has levied the GST on rent of residential property under RCM (Reverse Charge Mechanism) subject to one condition i.e. tenant is registered under GST.
If the tenant is registered under GST then he has to pay the GST on rent of residential property irrespective of the amount of rent. There is no any obligation on the landlord to pay the GST on rent of residential property.
example :
If GST registered company have taken a residential property on rent and they are paying a rent of Rs. 2,00,000/- pm. to the landlord. Now in this case, company have to pay the GST on Rs. 2,00,000/- @ 18% every month. because this case is under RCM. so even if the annual residential rent of the landlord exceeds Rs. 20 lakhs then also he do not require to take the GST registration due to RCM.
Some Situations in which tenant has to pay the GST under RCM:
1. If GST registered company or person is taken a residential property on rent for his employees or officers
2. If GST registered company or person is taken a residential property on rent for his guest
3. If GST registered company or person is provided the alternate accomodation to the landlords in case of Redevelopment of Societies or any properties
4. If GST registered company or person is taken a residential property on rent for his proprietor or partner
To summarise the story, if tenant is registered under GST and taken a residential property on rent then irrespective rent amount, purpose of use of property, landlord’s registration status under GST he has to pay the GST on residential rent under RCM
But now questions is whether the ITC is available for same ? In common sense it should be but GST department has to clarify it in the legal form.
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If rent for the FY 22-23 is paid at once in the month of Apr’22, then will RCM apply on such transaction.
whether PSU nationalised banks are required to pay GST for rent of their branches
If a GST Registered Company/LLP takes a building on rent for its office from an unregistered individual. The building is being used as the Company’s registered office. Is the company required to pay RCM in this case? Is the building treated as residential property or commercial property in this case?
If Delhi based GST registered company is taken a residential property on rent for his guests in other state like Haryana, Then the GST Registered Company are eligible for claim ITC against the Rent Paid RCM.
If 2 persons have a GST but the Tenet not give gst amount of Rent that time the owner of the house file the gst with RCM it can Possible ???
Can we avail RCM paid on Rent of Guest House?
Mr.Nitesh,
If residential property taken by the regd. person i.e company for its employees then GST will be payable on RCM Basis. Even though it is business expenditure under income Tax act, in GST it is covered under Blocked Credits U/s 17(5). hence ITC Cant be availed since it is personal usage of Employee