GST on services by NRI

[Kaustubh Karandikar]

XYZ is a Non – Resident Indian staying in U.K., He is owning a commercial office in India which he wants to rent out to PQR(India). XYZ need to obtain GST Registration as non – resident taxable person or PQR need to pay GST under reverse charge?

[SHARAD ANADA]

Sec 2 (77) “non-resident taxable person” means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India;

The meaning of the term ‘non-resident taxable person’ covers all person who undertake transactions involving supply of goods or services or both, whether or not such supplies are taxable, so long as such person neither has a fixed place of business nor residence in India.

However, a person who does not undertake transactions involving any supplies “occasionally”, he would not be treated as a non-resident taxable person. The law does not define the frequency implied by the expression “occasionally”. Therefore, where there is a reasonable frequency of occurrence of supplies in India, it must be construed as transactions occurring occasionally.

Sec 22. Persons liable for registration (1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:

In this case person is undertake transaction on regular basis and not on occasional basis then he is regular taxable person and as he is providing service he is liable for GST regn in the state where the property situated and if his aggregate turn over exceeds 20 lakh

[KASTURI SETHI]

Well churned and well explained by Sh.Sharad Anada ji. The service mentioned by the querist does not qualify to the legal definition and literal meaning of the word, "occasionally". Hence this service is out of gamut of “non-resident taxable person”. Regular registration is required. No question of RCM.

[Ganeshan Kalyani]

I am also of the view that the service of renting of office is a continuous supply. Had it been a professional service one would have assumed to be of occasional nature. It may not be. But in the example it is apparent that it is a regular supply. The supplier of service has to take registration and do compliance. The threshold limit has to be considered.

[YAGAY and SUN]

We endorse the views of our experts.

[Subramanian Narayanan]

I have seen other views where NRI's (even without a permanent establishment/residence) providing occasional service is also subject to GST and has to register. Even one time provision of service, the GST registration is compulsory and this has to be done before providing the service itself. This becomes a tedious process for an NRI who just wants to provide service not getting into tax web of GST. Why does the govt. not allow reverse charge to be done and the onus on GST be on the receiver of services. Once registered in GST, one has to file various forms monthly/annual despite occasional service.

AI Summary

GST registration requirement for non-resident service providers: rental of commercial property triggers supplier registration, not reverse charge.
The question concerns whether an NRI letting a commercial office must register for GST or whether the lessee must pay under reverse charge. The statutory term non-resident taxable person applies only to persons who "occasionally" supply goods or services and lack a fixed place of business in India; regular or continuous supplies do not qualify. Letting an office is generally a continuous supply, so the supplier must obtain GST registration in the State where the property is located and comply with registration thresholds and filing obligations; reverse charge does not ordinarily apply in that scenario.