regarding excemption on rent

[FARIDUDDIN AHMAD]

a government of india undertaking unit of factory engaged in the business of manufacturing at rae bareli collected rent of Rs-1,17,20,657/- from there employee on the residential facility provided to staff in the quatres(House) build for residential purpose and declared it in GSTR-3B as exempt supply. factory received SCN u/s 73 requiring to deposit tax on exempt supply. kindly advise it is exempt supply or taxable on the basis of RCM.

AI Summary

Government Entity Challenges GST Demand on Employee Rent Exemption; Seeks Clarification on Reverse Charge Mechanism Applicability A government undertaking in Rae Bareli, involved in manufacturing, collected rent from employees for residential facilities and declared it as exempt supply in their GST return. They received a show cause notice under Section 73 to deposit tax on this exempt supply. The discussion involves whether the rent is exempt or taxable under reverse charge mechanism (RCM). Queries include the period involved, the nature of rent collection, and whether it applies to outsiders. The department has requested reversal of common input tax credit as per rules. Clarification is sought on the applicability of these rules to the exempt supply.