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 liability on commercial rent: whether a local power of attorney must register and discharge tax for a non resident owner.
GST liability where a non resident's commercial property is let through a General Power of Attorney (GPA) raises whether the GPA must register and pay tax, effectively shifting collection from the non resident supplier to the local agent. Key operative concerns are applicability of the aggregate turnover exemption, whether reverse charge under import of service rules or domestic forward charge applies, consequences for prior IGST and ITC if retrospective liability is asserted, and whether place of supply leads to CGST+SGST rather than IGST.