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GST RATE ON OFFICE RENT

NARENDRA (ACCOUNTS MANAGER) (1914 Points)

13 October 2020

What is the gst rate on office rent ? any threshold limit applicable for this ? How rcm is working ? Tds applicable or not ?

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4 Replies

RAJA P M ("Do the Right Thing...!!!") (128085 Points)
Replied 13 October 2020

What is the gst rate on office rent ?
- GST rate @ 18%

any threshold limit applicable for this ?
- No. If landlord is registered then he can issue Tax Invoice from rs 1.
otherwise GST threshold limit applicable.

How rcm is working ?
- rcm not applicable except promoters

Tds applicable or not ?
- Yes... Applicable as per TDS provisions.

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Shivam RC (Student) (23683 Points)
Replied 13 October 2020

Q1). What is the GST Rate on Office Rent ?

GST Rate : 18%
SAC CODE : 997212
DESCRIPTION : Rental or leasing services involving own or leased non-residential property.

Q2). Any threshold limit applicable for this ?

If the Landlord is Registered under GST, then he needs to collect GST @ 18% on the Rent Amount and have to issue a proper Tax Invoice. But if he not registered under GST, then he needs to check the threshold limit of Rs. 20 lakhs. If the value of Annual Rent exceeds Rs. 20 lakhs, then your landlord needs to apply for GST Registration and collect GST for the Rental Services. If the rental income is less than Rs. 20 lakhs, then the landlord is not required to take GST Registration.

Q3). Is RCM applicable on this transaction ? How RCM is working ?

NO. Reverse Charge Mechanism (RCM) is not applicable on Renting Services. Neither Section 9(3) nor Section 9(4) of the CGST Act 2017 which deals with RCM covers this Transaction. Section 9(4) i.e. Purchase from Unregistered Dealer is now applicable only on notified goods or services procured by notified suppliers ( w.e.f 01/02/2019 vide CGST Amendment Act 2018 ). As of now only Developers / Promoters are notified for Section 9(4) applicability.

Q4). Is TDS applicable on Renting Services ?

YES. TDS @ 10% needs to be deducted under Section 194-I of the Income Tax Act 1961 if the aggregate value of rent exceeds Rs. 2,40,000.

As far as GST TDS is concerned, it will be applicable only when the Service Recipient ( Tenant ) is a Government Department or any local authority. The Rate of GST TDS U/s 51 of the CGST Act 2017 is 2% and is applicable only when the Contract Value exceeds Rs. 2,50,000. In any other cases no GST TDS is applicable.

Regards.