Rental Income by Director from Company

[Raveendran PM]

Issue : 1

Director had let out his commercial property in 2021-22 to its company, where company had paid under Reverse Tax , being there was grey area on this aspect, on which CBIC clarified in Aug-2023 m that such income should be under forward charge only .

Rental Income for 2021-22 was 23 lakhs and 2022-23 -29 lakhs.

What recourse to be taken now ?

Form 2023-24, after the above clarification no RCM paid by the company, and director want to take the registration , on crossing 20 lakhs, If it is correct?

Issue : 2

Can Director give his residential property to its company at nominal value , say as consent Fees, on considering the Rule 28 provisions . As the liability under reverse charge, company can avail IT

CA. Raveendran P M

AI Summary

Director Seeks Guidance on GST Registration, Rule 28 Implications for Renting Residential Property to Company A director rented out commercial property to his company, which paid GST under reverse charge due to unclear guidelines. The Central Board of Indirect Taxes and Customs later clarified this income should be under forward charge. The director seeks guidance on GST registration after surpassing the 20 lakh threshold. The director also considers renting a residential property to the company at a nominal rate, questioning the impact of Rule 28 of the CGST Rules. Responses suggest obtaining a declaration from the company regarding GST payments and confirm that nominal rental value is acceptable if the company can claim full input tax credit.