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GST on immovable property.

01 May 2020

whether GST is applicable if immovable property of partners is being used by partnership firm without rent i.e. without consideration?

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5 Replies

MARIES (GST Consultant) (219 Points)
Replied 01 May 2020

@ sukhwani keyur.

Dear Sir, as per first Schedule to GST Act, supply of goods or services without consideration between related persons is a taxable supply. In this case, the partner and the partnership firm are treated as two separate legal entity. They are qualified as related persons as per the explanation given to section 15 (one of them directly or indirectly controls the other). Hence, GST is payable.

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 01 May 2020

GST is applicable for the rent which is given by partner to firm...

Shivam RC (Student) (23683 Points)
Replied 01 May 2020

GST is applicable even if there is NO CONSIDERATION as it is a SUPPLY by virtue of Para 2 of SCHEDULE I of the CGST Act 2017.

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CA Altamush Zafar (GST Consultant) (15971 Points)
Replied 01 May 2020

Rent of such property will be come under supply. Valuation will be done as section 15 for related parties.

But then you also have to see that annual rent value as per section exceeds the registration limit. If the partners are already registered then GST payable.