Payment of Commercial Premiums Rent

[MUNIRAJ SRINIVASAN]

Dear Sir,

My client has made payment of Rent of Rs. 106000/- per month, but provider not a registered person ,Rent receiver has to pay RCM under GST ?

[Amit Agrawal]

'Where the residential dwelling is rented to a registered person', liability to pay GST is on 'recipient' (i.e. a registered person) under RCM, irrespective of whether the service provider / supplier is also a registered person or not.

However, above provision is NOT applicable for 'commercial property' (such as shop / offices etc.) are given on rent.

From subject-line of your query, it is presumed that query is about 'commercial property' (such as shop / offices) and service provider is located in India.

And if so, prevailing RCM provisions does not apply and your client need not pay any GST under RCM on subject transaction even when service provider is not registered under GST.

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

[KASTURI SETHI]

It is entirely the responsibility of service provider whether to get registered or not. No RCM on commercial property renting. The status quo is maintained in this aspect during recent amendment on renting of residential property.

[Padmanathan KV]

In case of renting of commercial property, the recipient is not liable to pay GST under reverse charge.

AI Summary

Reverse charge liability for rental services: no RCM on commercial property rent, recipient not required to pay GST.
Where a residential dwelling is rented to a registered person, the recipient must pay GST under the reverse charge mechanism irrespective of supplier registration; however, rent for commercial property (shops, offices) is not subject to reverse charge and the recipient is not required to pay GST under RCM even if the supplier is unregistered.