Rental income from residential property has been kept out of preview of Goods and Service Tax (GST). But if you have any rental income from let-out of commercial property over 20 lakhs annually then it will attract GST. It means that you do not need to register or charge under GST unless your rental income exceeds 20 lakhs annually. The GST rate on let-out of commercial properties is 18%.
As per notification 8/2017, Purchases upto Rs. 5,000 per day from unregistered suppliers will not attract GST. In other words, there is a reverse charge on buying from unregistered dealer/s if you are dealing with unregistered suppliers and making payments above Rs. 5,000 per day.Online GST Certification Course by TaxGuru & MSME- Click here to Join
As per section 9 (4) of Central Goods and Service tax act which elaborates that if a registered person purchases goods/services from an unregistered dealer (URD) then the registered taxpayer is liable to pay GST on reverse charge basis. So the person paying rent (tenant) for commercial property needs to follow section 9(4) and charge GST under reverse charge mechanism on behalf of unregistered landlord.
Conclusion: Even if the threshold limit has been set for the landlord for charging GST on rental income but still the rental income will attract GST which will either be paid by the registered landlord or the registered tenant (under RCM).