Rent Received from Govt. whether exempt

[Rajan Atrawalkar]

My client has rented his godown to District collectorate for storage of Agricultural produce and received rent against it. While making payment through bank transfer, the collectorate office has deducted 10% TDS and 2% GST. What will be the GST liability of my client? Does serial no 3. Of Mega Exemption Notification 12/2017 apply to it?

(3.) 12/2017 : “Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.”

AI Summary

GST on rent from government: renting to a government office is taxable unless tied to functions entrusted to local bodies.
Whether rent received by a registered business for leasing immovable property to a government office attracts GST and whether the exemption for services provided to government entities applies. One view rejects the exemption for renting of immovable property absent a connection to functions entrusted to local bodies and treats leasing as taxable; exemptions for storage do not cover renting. An alternative view argues that leasing for storage of agricultural produce could fall within entrusted functions like agriculture or public distribution and thus be exempt if so connected.