Reverse charge on Residential Dwelling

[Madhavan iyengar]

Dear Sirs

Companies / Persons have GST Regn in the State where factory and Corporate Regd Office is situated and they effect their supplies.

In addition to above they have Sales offices in Different states where there is effectively no supplies taking place. Hence they have not obtained GST Regn in those States

as a result of this new RCM Notification (05/22 dtd 13/07/2022) if they have sales office in Residential Premises in other states will they be liable to pay RCM, will the Section 24 compulsory Regn have any impact

Section 24. Compulsory registration in certain cases.-

Notwithstanding anything contained in sub-section (1) of section 22 , the following categories of persons shall be required to be registered under this Act,-

(iii) persons who are required to pay tax under reverse charge;

Experts kindly give your views

AI Summary

Reverse charge on renting of residential dwelling can create registration and RCM obligations for recipients across state establishments.
Liability under reverse charge for renting of residential dwelling depends on whether the recipient is a registered person and whether the sales-office in another State qualifies as a fixed establishment or a distinct person; if the contracting recipient is the registered head office or factory, reverse charge may be payable even when the local sales-office lacks separate registration, while if the recipient was unregistered at the time of transaction the reverse charge entry tied to renting to a registered person would not apply.