GST on residentail premises given on rent

[Kaustubh Karandikar]

XYZ(Proprietor) is registered with GST. He had rented his residential premises to PQR Pvt. Ltd. where employees of PQR are staying but rent is paid by PQR to XYZ. PQR is also registered with GST. As per the amended provisions, whether XYZ is required to pay GST under forward charge or PQR is required to pay under reverse charge?

[Amit Agrawal]

'Where the residential dwelling is rented to a registered person', liability to pay GST is on 'recipient' under RCM, IRRESPECTIVE of the fact that service provider / supplier is also a registered person.

So, in given example, PQR Pvt. Ltd. needs to pay GST under reverse charge. And, XYX (Proprietor) needs to raise tax-invoice but showing liability to pay GST is upon the recipient under reverse charge.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Kaustubh Karandikar]

thanks sir for your kind advice.

[Mahadev R]

Agree with Amit sir's view. The big question is about ITC eligibility of such GST paid under RCM.

[Shilpi Jain]

This amendment has led to taxing scenarios that were exempt earlier i.e. residential dwelling used as residence.

It has also led to forward charge transactions being liable under rcm ime. Residential dwelling rented and used as commercial, which has led to ITC restriction in the hands.of the supplier say repairs etc.

[Ganeshan Kalyani]

This amendment is to tax the registered recipient of residential dwelling under reverse charge.

Since the taxability is on registered recipient the status of service provider being registered or not is not relevant.

AI Summary

Reverse charge on rented residential premises places GST liability on the registered recipient, regardless of supplier registration. Where a residential dwelling is rented to a registered person, GST liability falls on the registered recipient under the reverse charge mechanism regardless of the supplier's registration; the supplier must issue a tax invoice while the recipient pays GST, creating newly taxable scenarios previously exempt for residential use and raising questions about input tax credit eligibility for GST paid under RCM.