RCM Tax on residential property

[Ethirajan Parthasarathy]

Renting of residential unit to (GST) registered person is liable to GST under RCM.

A proprietor of a business entity is registered under GST. Is he liable to pay GST on house taken by him for is personal residence.

If yes, it may be additional burden for him since he cannot take ITC on such tax paid by him since the rent paid is personal expense. Can experts give their view on this.

AI Summary

Debate on GST under Reverse Charge Mechanism for renting homes to registered individuals; clarifications needed on ITC denial. A discussion on the applicability of the Goods and Services Tax (GST) under the Reverse Charge Mechanism (RCM) for renting residential properties to registered individuals. A business proprietor renting a home for personal use is liable to pay GST, but cannot claim Input Tax Credit (ITC) as the rent is a personal expense. One view suggests this could be unconstitutional due to discrimination between registered and unregistered persons. Another perspective argues RCM is not applicable if the dwelling is rented personally, not by the business. Clarifications are needed to address these issues.