RCM liability on Rent of House or Offices

[mk Jain]

Is there any RCM liablity on registered service receiver if service provide is unregistered for below two situation:

1. For residential house rent below than 50,000

1. For Commercial property rent below than 50,000

MK

[KASTURI SETHI]

You have mentioned your query in the category of Service Tax . Do you want reply for ST or GST ? Pl. confirm.

[mk Jain]

Sir GST in current situation.

MK

[KASTURI SETHI]

(i) Pl. elaborate your query.. What do you mean by below Rs.50,000/- ? Are you talking of threshold exemption limit ?

(ii) Also see serial no.5 A of Notification No.13/17-CT(Rate) dated 28.6.17 as amended on 18.7.22. If residential property is provided to a registered person, RCM is applicable. See the definition of registered person in this context.

(iii) Renting of immovable property for commercial purpose is under FCM.RCM is applicable if renting of immovable property is supplied by Govt.

[mk Jain]

Thanks for your valuable reply.

If we are paying the rent of amount Rs. 40K on resident then want to know RCM liablity ( landlord is unregistered and tenent in registered) or what is the meaning of below search

Search instead for RCM liablity on rent of residential property and any rent limit

Search Results

Featured snippet from the web

The rate of GST applicable on residential rent under RCM is 18%. This means that if the monthly rent paid by the tenant to the landlord exceeds Rs. 50,000, the tenant is required to pay GST at the rate of 18% on the amount of rent paid.

21 Mar 2023

MK

[Shilpi Jain]

There is no liability on the recipient of the service i.e. tenant for renting of commercial property.

In case of a residential property, if it is used for any purpose other than for own residence by the tenant in the present case, liability will exist under RCM.

So say a residential property is rented by the service receiver and the same property is further rented by him then such receiver will be liable to pay GST under RCM.

Rent amount will be of no relevance here.

[KASTURI SETHI]

Dear Querist,

Pl. refer to your query at serial no.4 dated 18.1.24 under the heading 'Featured Snippet dated 21.3.23'. I could not trace out any authority or such basis of cap of rent for Rs.50,000/-.

[mk Jain]

Lot of thanks to all of you for your valuable reply.

MK

AI Summary

Reverse Charge Mechanism on rent depends on property type and recipient use; commercial rent is generally forward charge.
RCM on rent under GST depends on property nature and recipient use: commercial rent is generally on forward charge so the tenant is not liable under RCM; residential rent may attract RCM when supplied to a registered person or when the recipient uses the property for purposes other than own residence (e.g., subletting); rent amount does not determine RCM applicability and there is no authoritative monetary cap referenced in the discussion.