TaxTMI 
TaxTMI 
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.
regarding excemption on rent
10 Feb 2024 
11 Replies 
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GST exemption on staff residential rent and whether input tax credit must be proportionately reversed under reversal rules.
Whether rent charged by a Government of India undertaking from employees for residential quarters is an exempt supply under GST and whether common input tax credit must be proportionately reversed. The unit declared such receipts as exempt in GSTR-3B; a show cause notice requires reversal or deposit of tax. The department has sought reversal under the input tax credit reversal rules. The enquiry also raises the issue of different treatment if residential facilities were provided to outsiders rather than employees. (AI Summary)
Whether rent charged by a Government of India undertaking from employees for residential quarters is an exempt supply under GST and whether common input tax credit must be proportionately reversed. The unit declared such receipts as exempt in GSTR-3B; a show cause notice requires reversal or deposit of tax. The department has sought reversal under the input tax credit reversal rules. The enquiry also raises the issue of different treatment if residential facilities were provided to outsiders rather than employees. (AI Summary)