GST applicability on Rent ?

GST APPLICABILITY ON RENT

GST applicability on rent depends on factors like the type of property and the terms of the rental agreement. For the purpose of GST on rent we need to know the nature of property because there are different GST law and rules applicable according to the nature of property.

Commercial Properties: In case of commercial property there is no confusion of GST applicability means renting of commercial properties is subject to GST. The GST rate applicable on commercial properties is 18%. Therefore, landlords need to charge 18% GST on the rent amount for commercial properties.

Residential Properties: In care of residential properties there are two possibilities first one is the said property is let out for residential purpose then renting of such property for residential purpose is exempted from GST. Another possibility is the residential property is let out for commercial for purpose. If the residential property is let out for commercial purpose and landlords are registered person, they will charge GST @ 18% under FCM and if landlords are unregistered then Tenant need to pay GST on rent under RCM.

Input Tax Credit: If the Taxpayer is registered under GST, they can claim input tax credit on the GST paid on maintenance and other related expenses of the property subject to the ITC rules under GST.

Furthermore, the above GST rules apply to all types of properties, whether they are furnished or unfurnished and TDS provision also applied according to the section 194I and 194IB as the case may be.

It is recommended to you to consult with the GST Practitioner and Chartered Accountant about the GST applicability on Rent because gst law is very frequently changed.

CA Khalid Rehman

(M.Com, Chartered Accountant)

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