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Members of the Tamil Nadu Vanigar Sangangalin Peramaippu staged a demonstration in Tiruchi on Wednesday seeking withdrawal of the 18% Goods and Services Tax (GST) levied under the Reverse Charge Mechanism on rents paid for commercial properties.
Traders and shopkeepers across Tamil Nadu went on a strike on Friday to register their protest against the 18 per cent GST for rent on commercial buildings.
CBIC replied to Shri Kodikunnil Suresh Ji, Hon’ble Member of Parliament (LS), New Delhi regarding the withdrawal of GST imposition on rent for commercial properties under RCM.
Hotel and restaurant owners in Kerala are up in arms over the state government’s imposition of GST on buildings they rent to run their businesses.
The GST department has introduced new rules, effective from 10th Oct, that will impact tenants of leased commercial properties. Under these rules, if the property owner is not registered under GST but the tenant is, the tenant will be required to pay 18% GST under the reverse charge mechanism (RCM).
AAR Tamil Nadu, in the case of M/s. Metropolitan Transport Corporation, ruled that in pursuance of a contract entered into prior to appointed day, if, price of any goods or services or both is revised upwards on or after appointed day, then, in case of such upward price revision, a registered person will issue a supplementary invoice or debit notes within 30 days from date of revision and such revision shall be treated as ‘supply’ under the CGST Act Act. Hence, GST is payable.
RCM on Commercial Rent refers to the Reverse Charge Mechanism, where the recipient (tenant) is liable to pay GST on commercial rent.