gst on house rent

[jayesh thacker]

our company provide house to some employee and pay rent monthly by company total 4 house rent amount is 35000/- in this case gst is applicable or not

[Himansu Sekhar]

Renting of immovable property for residential purpose no gst.

[Ganeshan Kalyani]

No GST is applicable.

[KASTURI SETHI]

I support the views of both experts. Exempted from GST vide Notification No.12/17-Central Tax (Rate) dated 28.6.17 (Serial No.14). Read the conditions laid down.

[DR.MARIAPPAN GOVINDARAJAN]

Yes, it is exempted.

[KASTURI SETHI]

Sh.M.Govindarajan Sir,

I have observed that your contribution towards Article Section is much more as compared to replies to queries (Issue ID). It is a matter of interest. Kindly increase ratio of your replies to queries in issue ID Section. Your approval or disapproval in respect of replies posted makes the concept very much clear not only to all the visitors but experts also.

Thanks.

K.L.SETHI

[CABIJENDERKUMAR BANSAL]

Sir,

below is serial no. 14, that is basically related to guest house, hotel which are giving for accommodation on day basis. As per my view , above query should not be covered by it.

14

Heading 9963

Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent.

Nil

Nil

Basically there is serial no. 12 as below :-

12

Heading 9963 or Heading 9972

Services by way of renting of residential dwelling for use as residence.

Nil

Nil

Please correct me if i am wrong.

CA Gorav Goyal

[subramanian vijayakumar]

Yes it is for residential purpose no gst experts pl see that the company. Is providing facilities of accomadation for employees for this expenses he cannot. Avail itc am l correct experts pl

[KASTURI SETHI]

Dear Sir, You are absolutely right. Sh. Goyal CA is requested to read the language, "by what ever name called".

[CABIJENDERKUMAR BANSAL]

Kasturi Ji,

Then what type of services will be covered under serial No. 12. ?

Actually Serial No. 14 :- there charges are on per day basis. and for employees accommodation guest house or house will be taken on monthly rent.

please clarify why it should not be covered under serial no. 12

[KASTURI SETHI]

Difference between Serial No.12 and 14 of Notification No.12/17-Central Tax Rate dated 28.6.17.

Serial No.12 is meant for non-commercial and fully & unconditional exemption. It is meant for those persons who cannot afford their own house. Therefore, Govt. does not want to levy GST on such persons as burden of GST will be on consumer ultimately.

Serial No.14 is meant for commercial purpose only and exemption is conditional. Whether you call it house or guest house it makes no difference. These accommodations are attached to company and company or factory is commercial.

After reading the provisions and anlysing the nature of transaction i feel it can be interpretated in two ways:

1) Company is paying rent for residential use of Staff/Employee of its company, which (Rent) is part of its employment policy or is part of employment benefits or part of employee's Salary.

Then the said rent paid by the company is not liable to levy of GST .{As rent paid by company are indirectly recovered from employee}

2) Company is paying rent for residential use of Staff/Employee of its company, which (Rent) is not part of its employment policy or is part of employment benefits or part of employee's Salary.and the company is claiming as expenditure in its profit and Loss A/c. which means the expenditure is done for Business (may be to retain the employee for long term or any other reason).

Then the said rent should be liable to levy GST .

Although it has not been specifically mentioned in Act but a logical interpretation can be made from the above case.

Please give your views if your opinion is in favor/against to me.

Regards:

Harshit Jain

FCA

AI Summary

Renting of residential property exemption: company-provided employee housing generally attracts no GST, subject to commercial-use exceptions.
Renting of residential dwellings for use as residence is exempt from GST under the relevant notification; commercial or per-day accommodation (hotels/guest houses) is treated differently. The taxability depends on whether company-provided housing is a non-commercial employment benefit (generally non-taxable) or a commercial expense/letting (which may attract GST). Input tax credit and the precise exemption conditions must be examined to classify the supply correctly.