GST on residential dwelling under RCM

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 accommodation 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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