GST Applicability on Rental of Properties including Residential Properties

Changes have been made in Notification No. 4/2022-Central Tax (Rate) amending the Notification No. 12/2017-Central Tax (Rate) (pertaining to Exempt Services) and Notification No. 5/2022-Central Tax (Rate) amending Notification No. 13/2017-Central Tax Rate (pertaining to RCM).

(Exact Language of Changes is mentioned in Last Section of the Article)


Current position on applicability of GST on Rental of Properties including Residential Properties after incorporating latest changes is tabulated below:

Property

Supplier

Receiver

Taxable

Forward/RCM

​Commercial

Registered

Non-Registered/Registered

Taxable

Forward

Commercial

Non-Registered

Registered

Non-Taxable

N.A.

Residential

Registered

Non-Registered

Non-Taxable

N.A.

Residential

Non-Registered

Registered

Taxable

RCM

Residential

Non-Registered

Non-Registered

Non-Taxable

N.A.

Residential (If Proprietor takes Property on Rent for Self- use)*

Non-Registered/ Registered

Registered/ Non- Registered

Non-Taxable

N.A.

Residential (If Partner Ship Firm takes Property on Rent for use of Partners)*

Non-Registered/ Registered

Registered

Taxable

RCM

Residential (If Partner takes Property on Rent for Self-use)*

Non-Registered/ Registered

Registered/ Non- Registered

Non-Taxable

N.A.

* This has been clarified through PIB Fact Check as shown below. In this case, in our opinion, it appears that in case Rent Deed is made in the Name of Partnership Firm, then it will be taxable in the hand of P.Firm even if it is used by Partners.



Text of Changes in Notifications

Notification No. 4/2022 Central Tax (Rate) amending Notification 12/2017 Central Tax(Rate)


..... (b) against serial number 12, in column (3), after the words “as residence”, the words “except where the residential dwelling is rented to a registered person” shall be inserted;....


Notification No. 5/2022 Central Tax (Rate) amending Notification 13/2017 Central Tax(Rate)


.....(3) after serial number 5A and the entries relating thereto, the following serial number and entries shall be inserted, namely: -

(1)

(2)

(3)

(4)

"5AA

Service by way of renting of residential dwelling to a registered person.

Any person

Any registered person.”;

......


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Note:

This is the personal opinion of the Fab Gyan. Adequate Care has been taken to interpret the provisions of Law, however there can always be chances for human error. Therefore, it is advised that before taking any decision, please consult with your Tax Adviser. Fab Gyan will not be responsible for any harm in what soever way.


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