Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

GST on Rent paid

02 February 2019

A GST registered dealer has to pay Annual Rent of Business premises to Landlord ( joint owner ..one is having prop business having GST regn..and the co owner house wife )..Please tell the implication of GST from the angle of payer as well as receiver...Annual Rent is Rs 6.00 lacs..Thanks

Reply
Follow
Share

7 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (166147 Points)
Replied 02 February 2019

Owner has to raise GST invoice.

Tenant has to pay the same and can take ITC.

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Prem Kewalramani (292 Points)
Replied 02 February 2019

the ownership is joint and one of the co owners is housewife...then GST regn is not there...what the scenerio will be in this situation..

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (166147 Points)
Replied 02 February 2019

Depends upon ownership ratio, rent agreement, and rent receipt.....

1 Like

Prem Kewalramani (292 Points)
Replied 02 February 2019

sir ownership is 50 /50..since they do not have GST regn how they can raise Invoice for Rent Receivable What will be the consequence if we pay them without Invoice raised by them..as was being done in past...

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (166147 Points)
Replied 02 February 2019

As husband is registered under GST, he has to issue tax invoice for taxable supply.

Upgrade to CAclubindia Pro. Subscribe Now!

Prem Kewalramani (292 Points)
Replied 02 February 2019

Thanks sir...Please inform what will the rate of GST ..18% OR 12%..IF one of the owners i.e husband has GST regn...if he issues one bill for Total Rent..and then tranfers Half portion of amount to other co owner..then its ok..In his profit and loss account 50% of rent i e.Rs 3.00 lac will be income...

Ahmed Ali Areeb (Student CA Final ) (99 Points)
Replied 02 February 2019

As the landlord has GST registration as a proprietor, he is supposed to raise a tax invoice on the tenant as per Rule 46. Value of rent in the tax invoice shall be only Rs. 25,000 per month i.e. 50% of total monthly rent. GST @ 18% shall be charged on such amount accordingly.

As the landlady is not registered, she is not required to comply any provisions of GST law. If her total turnover/gross receipts during a financial year is more than 20 lacs then she should get Registered and follow the same procedure as her husband.

And for the tenant, he can avail ITC on the monthly rent of Rs. 25,000 if he receives tax invoice from landlord. Further the landlord should include this rental income in his outward supply of his GSTR-1. As of now, no reverse charge compliance is required for the remaining Rs. 25,000 paid to the landlady.

1 Like