RCM on rent recd from private limited company

[PRIYACHARAN SR]

GST Dealer(landlord) has given his property(apartment) on rent to a pvt ltd company (tenant)! however it is used by director for his residential purpose. Whether company(tenant) needs to pay gst under rcm. ? Kindly advise

[Padmanathan KV]

Yes. The company will have to pay GST under reverse charge on the rent paid.

[Amit Agrawal]

Assuming that the recipient of 'service by way of renting of residential dwelling' (i.e. Pvt. Ltd. Co.) is registered (or liable to be registered) under GST, such recipient needs to be pay GST under Reverse Charge Basis (irrespective of the fact that said recipient has allowed its director to use subject apartment for his own residential purpose).

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

[Shilpi Jain]

Yes liable under RCM

Exemption is available in case of renting to registered person only if the said property is used by such registered person for its personal purpose. i.e. say rented to proprietor who uses the property as his residence (personal purpose)

[Ganeshan Kalyani]

No doubt, RCM is applicable on this service.

AI Summary

Reverse charge on rent: recipient company must pay GST even if the rented apartment is used by its director. A private limited company renting a residential apartment from a registered GST dealer is liable to pay GST under reverse charge as the recipient of renting of a residential dwelling if it is registered (or liable to be registered). Use of the premises by the company's director for residential purposes does not negate the company's reverse charge liability. An exemption applies only where the registered recipient itself uses the property for personal purposes (e.g., a proprietor occupying it personally), which does not cover corporate-tenancy-used-by-director situations.