RCM - Residntial Dwelling

[Ethirajan Parthasarathy]

As per recent amendment, Service by way of renting of residential dwelling to a registered person by any person is subject to RCM tax. I have two doubts about this entry :-

My view is a building is treated as “residential dwelling” based on original plan sanction & it will not become commercial building just because municipal tax / water tax are paid at commercial rate. Is my view correct.

In a particular situation, a residential dwelling let out for commercial purpose is situate in Bangalore & landlord resides in Chennai. Will the tenant be liable to pay IGST or CGST / SGST under RCM

AI Summary

Reverse charge on renting of residential dwellings: registered recipients must pay GST and determine intra or inter state tax liability.
Reverse charge applies to renting of a residential dwelling when the recipient is a registered person, requiring that recipient to pay GST under reverse charge; classification of the property as residential depends on applicable property records rather than municipal tax rates. If supplier and recipient are in different states, the registered recipient must pay IGST under reverse charge; state registration may be required in the state of supply, though compulsory registration solely due to this entry is contested. Once registered, the recipient must account for onward supplies under forward charge regardless of turnover.