GST EFFECT ON RENTED PROPERTY IF TENENT IS REGISTERED IN OTHER STATE

[Guest]

HI

I HAVE A COMMERCIAL PROPERTY IN MEERUT UTTAR PRADESH. TENET OF THIS PROPERTY IS REGISTERED IN U.P AND UTTARKHAND BOTH STATE . NOW HE SURRENDER HIS U.P. GSTIN BUT WANT TO CONTINUE AS TENET . HE EXPECT ME TO ISSUE TAX INVOICE ON HIS UTTARKHAND GSTN BUT OFFICE IN MEERUT . COULD I ISSUE HIM A IGST INVOICE.

[CASusheel Gupta]

It can be issued but remember to mention place of supply as "UP"

Thanks and Regards

CA Susheel Gupta

9811004443

[CASusheel Gupta]

Please note that IGST/C+S shall be dependent on your registration.

If u are also registered in UP than only C+S.

If u are registered in other than UP that IGST with POS UP

[KASTURI SETHI]

Dear Querist,

Yes. Tax invoice charging IGST can be issued. In respect of Renting of Immovable Property, the place of supply is where the property is located. Your property is located in U.P. and obviously you are registered in U.P..The location of supplier is in UP and so you can charge IGST as the place of supply is in Uttarkhand. It is pertinent to go through relevant provisions of IGST Act which are extracted below:-

Section 2 (14) of IGST Act, 2017

“location of the recipient of services” means, -

(a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business;

(b) where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;

(c) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and

(d) in absence of such places, the location of the usual place of residence of the recipient;

Section 2(15) of IGST Act, 2017

“location of the supplier of services” means, -

(a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;

(b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;

(c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and

(d) in absence of such places, the location of the usual place of residence of the supplier;

Section 12 Place of supply of services where location of supplier and recipient is in India.

(3) The place of supply of services, -

(a) directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work; or

(b) by way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called, and including a house boat or any other vessel; or

(c) by way of accommodation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property; or

(d) any services ancillary to the services referred to in clauses (a), (b) and (c),

shall be the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located :

Highlighted portions above are relevant, worth reading and applicable to the situation explained by you.

I support the views of Sh.Sushil Gupta, C.A.

 

[Guest]

dear KASTURI SETHI JI

in this case place of supply is in UP not in Uttarkhand as it is immovable property located at Meerut.

so i think i can not charge IGST. plz clear

[Guest]

dear sushil ji

one more query

Should i issue bill of supply insted of tax invoce as tenent surrenderd his UP registration . he is now only Registerd at UTTARKHAND.

[Guest]

dear sushil ji

one more query

Should i issue bill of supply insted of tax invoce as tenent surrenderd his UP registration . he is now only Registerd at UTTARKHAND. or i could issue tax invoice with IGST on uttarkhand GSTN

[KASTURI SETHI]

Dear Sh.Gaurav Kush Ji, Pl.refer to your query at serial no.4 dated 3.4.19 above. I agree with you. Since the supplier of service is located in UP and property is also located in UP, place of supply is within SState. Hence there is no question of charging IGST. It is not inter-State supply. It is intra-State supply.

[AKT associates]

In case a residential property is rented out, there will be no GST on that. Any other kind of renting, like commercial or industrial, would attract GST at the rate of 18 percent as letting-out a property would be treated as a supply of service.

If the rental income is more than ₹ 20 lakh per annum, then the landlord, which may be any entity like companies, will have to take a registration with GST Network (GSTN) and pay the GST on the rental income. Before GST came into effect, the threshold limit was ₹ 10 lakh. After GST has been introduced, the same limit has been kept at ₹ 20 lakh. This means that the landlords have a leeway of ₹ 10 lakh under the GST regime.

AI Summary

Place of supply governs GST on property rentals: property location determines intra state treatment, not tenant registration. Place of supply for renting immovable property is the location of the property; if the supplier and the property are in the same State the supply is intra state and IGST is not chargeable. Location of recipient rules (place of business, fixed establishment, or residence) inform determination of recipient location but do not displace the immovable property rule. Invoicing and whether to issue a tax invoice or bill of supply depend on supplier registration, the taxable nature of the letting (commercial v residential), and statutory registration thresholds.