Tax

GST applicability on Rent of Residential Property

LegalKart Editor
LegalKart Editor 01 min read 72 Views
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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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