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GST on shop given on rent to wine shop

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Chhalani and Associates

CA - www.cachhalani.com

92 Points Posted on 13 March 2023

X has given his shop on rent to Y for wine shop business. Y is exempt from GST (liquor sale) and has not taken GST registration. Is X supposed to recover GST from Y? At what percentage? How can Y claim refund of this GST as he is exempt.

Replies (5)

Quick Summary

If a shop is rented out for a wine business, GST may still apply to the rent, even though wine sales are exempt. GST is generally applicable at 18% if the annual rent exceeds £20,000 or if the property owner is registered for GST. The tenant, operating an exempt business, typically cannot claim this GST back, as it's treated as a B2C supply.

CA Sorav Gupta

Chartered Accountant

328 Points Posted on 13 March 2023

Yes, if the property's rent is more than Rs. 20 lacs in a financial year or the owner is registered or liable for registration under GST then the GST has to be charged on the rent. GST shall be charged at @ 18%.

In case of any further queries, kindly mail me at casoravgupta @ gmail.com

Thanks & Regards
CA. Sorav Gupta
(Practicing Chartered Accountant)

Bhagwat Singh

47 Points Posted on 13 March 2023

For all commercial spaces that are on rent, GST will be applicable at 18% on the taxable value and rent would be treated as a taxable supply of service. Y cannot claim GST IT WILL BE TREAT AS A B2C Supplies.