GST on Commercial Rent - NRIs

[Ethirajan Parthasarathy]

The Karnataka AAR in the case of Nagabhushana Narayana - 2023 (4) TMI 903 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA has held that if a non-residents let out his commercial property in India through his Power of Attorney (GPA) holder, than that GPA holder has to register himself and pay applicable GST.

My queries are :-

1. Whether the above ruling is subject to general exemption available for persons having aggregate turnover of 20 lakh

2. As per AAR judgment, rent payable to non-resident is shifted to forward charge provided GPA is involved. In such situation, whether the tenant should stop paying tax under RCM even if GPA holder is not registered under GST.

3. GPA holder of non-resident may be asked to pay applicable GST for past years also. In such a situation what will happen to IGST paid by tenants under RCM and ITC utilized on such payments for earlier years

4. If the aggregate turnover of non-resident is less than 20 lakh & getting commercial rent, there should be no GST impact either under forward charge or RCM (since it is no longer import of services). Is my view correct.

5. In a situation where GPA holder is in Karnataka & the commercial property of the NRI is in Tamilnadu, whether IGST is applicable or CGST/SGST

AI Summary

GST Required for GPA Holders on NRI-Owned Property Rentals; Debate on Turnover Threshold and RCM Implications The forum discusses the applicability of GST on commercial rent for properties owned by non-resident Indians (NRIs) and managed by General Power of Attorney (GPA) holders. A ruling by the Karnataka Authority for Advance Rulings (AAR) mandates that GPA holders must register for GST and pay applicable taxes. Participants debate whether the ruling applies if the NRI's turnover is below 20 lakh and whether the tenant should stop paying GST under Reverse Charge Mechanism (RCM). The discussion also addresses whether GST should be paid as CGST/SGST or IGST, depending on property location, and the implications of revenue neutrality.