Tax

GST applicability on Rent of Residential Property

LegalKart Editor
LegalKart Editor 01 min read 322 Views
Last Updated: Nov 21, 2023
GST, Rent, Residential Property

The decision to bring the renting of residential dwellings under the tax net was taken in the 47th GST Council Meeting. Renting an immovable property is considered a supply of service and it attracts GST @ 18%.

Here are few pointers related to the applicability of GST on rented residential property:

 

  1. GST will not be applicable/exempted if the residential property is rented out to an unregistered person.
  2. GST will be applicable if the residential property is rented out to a registered person under GST.
  3. Liability to pay GST @ 18% under the reverse charge mechanism will arise on the tenant.
  4. If the supplier (landlord/lessor) is registered under GST, then it will be shown as outward supplies liable to be taxed under the reverse charge mechanism.
  5. If the supplier (landlord/lessor) is not registered under GST. Liability to pay GST is on the recipient(tenant/lessee), hence no additional GST liability or any compliance under GST.

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