Reverse Charge - Renting of Residential Premises

[Kaustubh Karandikar]

Two Directors of XYZ Pvt. Ltd. are owning a Residential Premises. These directors are also staying in the same premises. Rent for the premises is paid by XYZ to both the directors. Whether XYZ is liable to pay GST on the same under reverse charge as per the new provisions introduced?

AI Summary

Debate on XYZ Pvt. Ltd.'s GST Liability for Director-Owned Residential Premises under Reverse Charge Mechanism, Section 12/2017 Exemption Discussed A discussion was held on whether XYZ Pvt. Ltd. is liable to pay Goods and Services Tax (GST) under reverse charge mechanism (RCM) for renting residential premises owned by its directors, who also reside there. Opinions varied: some argued that GST is applicable under RCM since the premises are rented to a registered entity, while others cited exemption notification No-12/2017, stating no GST applies as the premises are used for residential purposes. Additionally, if payments to directors are considered remuneration rather than rent, GST may not be applicable. The debate highlighted differing interpretations of GST provisions in such scenarios.