GST on Rent

[DEEPAK SHARMA]

Two individuals running separate proprietorship firm regd with GST. both are a joint owner of a commercial property. a rent agreement has been formed in which both are first party.

-how they will charge GST on rent ?

-both are interested to issue a single bill of rent in any name.

-Please suggest.

[Amit Agrawal]

Being fairly regular trade-practice, I have not understood any need to issue such single invoice - both from point of joint-owners of the property and the tenant.

Anyway, for query raised, my views are as follows:

Both owners are separate service-providers and are required to issue their own individual / separate invoices. And, on plain reading of relevant provisions, there is no option under law / rules where two registered suppliers issue single gst-invoice in given situation.

(As generally been the case, it is assumed that there is no 'Association of Person' (i.e. AOP) which got formed in this joint-ownership arrangement of property. And, this AOP argument will have its own set of challenges, risky and same needs to be avoided to the extent possible)

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

[Amit Agrawal]

W.r.t. my earlier post, kindly note that I have presumed that both the owners are also 'financial owners' of the subject property (i.e. income from the property will be booked by both owners - in their their individual accounts - as per their mutually agreed financial share ratio & both persons had funded buying subject property).

Mere joint-owner as per land / revenue records without financial ownership (For example: Many-a-times, name of spouse is added as joint-owner while buying a property for purpose of land / revenue record, even though property is funded & 'financially owned' only by single person and entire income from such property is booked by such single financial owner) does not require two invoices as entire supply (from commerce point of view) is provided by single person.

This distinction needs to be understood even though in both situations, rental agreement (for land / revenue record purpose) will carry name of both owners as 'party / persons' giving such property on rent.

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

[KASTURI SETHI]

It is a hypothetical query with an intent to explore possibility nothing else. No practicability at all. I agree with the reply of Sh.Amit Agrawal, Sir.

AI Summary

Separate supplier status generally requires individual GST invoices; single invoice only if sole financial owner. Where co-owners are separate financial owners and each receives rental income by share, each is a distinct supplier and must issue its own GST invoice; no rule permits two registered suppliers to issue a single consolidated GST invoice. If only one person is the financial owner despite joint record ownership, the supply may be treated as from that single owner and a single invoice may be appropriate. Treating the arrangement as an association of persons is risky and requires separate consideration.