GST on RENT

Page no : 2

Devyani Vengurlekar (9 Points)
Replied 10 July 2017

I have rented out premises to SBI and rent is 92000 per month. kindly let me know whether I need to register for GST and charge GST to bank?

Upgrade to CAclubindia Pro. Subscribe Now!

CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 10 July 2017

it is optional for you to register, not mandatory........my advise is not to register (bank will pay GST instead of you and take credit of the same if you not register yourself)

JERRY JOHN (62 Points)
Replied 10 July 2017

For want of double clarity, if landlord is unregistered also below Rs 20 lakh turnover, the tenant has to pay GST of 18% under RCM.
Hope this is correct. If it is correct, tenant can simply deduct GST from monthly payout and balance has to passed on to the landlord. In this case Composition will not apply as rent is coming under Service. Pl seek agreement or disagreement...

CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 11 July 2017

suppose the rent is 100000 and rate of tax is 18 %......than the tenant will have to pay GST on 100000 @ 18% (i.e. 18000) to the governement and he should not deduct this amount from the rent which he has to pay to landlord. Tenant will have to pay landlord full 100000.....tenant will get input credit of Rs 18000 which he has paid on reverse charge basis hence question of deducting it from the rent does not arise.....

even if the tenant is a composition dealer then also the position will remain the same.....because sec 9(4) clearly says that if "registered" dealer buy "GOODS or SERVICE or BOTH" from an "unregistered" dealer than he has to pay tax on reverse charge basis......it does not distinguish between regular or composition dealer.