GST Impact on Rental Income of a Residential House Property has given to a registered person

GST Impact on Rental Income of a Residential House Property has given to a registered person (Under GST) under GST Law w.e.f. 18.07.2022.
When a tenant is registered and takes a residential property on rent from any person (registered or unregistered person) GST will be applicable under RCM. Liability to pay GST @ 18% will be of the recipient (tenant/lessee) of service. The recipient will also be able to claim the ITC of the GST paid under reverse charge as the payment of rent will be a business expenditure and the same is not included in the list of blocked ITC u/s 17(5).

FOR EX-When a composition dealer who is registered under GST takes a residential dwelling for the purpose of residence on rent then it will be considered as an item of business expenditure. GST will be paid under RCM but the ITC of the GST paid under reverse charge cannot be claimed as per section 10(4) by a composition dealer.

EX-2-When a company takes a residential house property for use of residence on rent for employees if will be considered as an item of business expenditure. GST Tax will be paid @18% under RCM and eligible to claim Input Tax Credit by the company.

EX-3-When a company, registered under GST Law and take a residential property on rent for one of its director for residential purposes, then such company have to pay GST Tax @18% under RCM and thereafter, claim input tax credit (ITC) on the same.

NOTIFICATION 12/2017-  Renting of residential property was exempted

NOTIFICATION 04/2022-Renting of residential property to only unregistered person was exempted

NOTIFICATION 05/2022-Renting of residential property to registered person notified under RCM.

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