RCM on Rent Paid to landlords related to residential building used by the employees of the company

[Ashok G U]

Respected colleagues, We are a registered tax payer under GST. A private limited company engaged in manufacture business. We are paying rents to various unregistered landlords towards use of residential purpose buildings. These buildings are used by the employees of the company for their residential dwelling purposes.

Does the company is liable to pay GST under RCM as required by the Notification No Notification no. 05/2022-Central Tax (Rate) dated 13th July 2022?

If Yes, can the company claim the ITC of such taxes paid under RCM?

Thank you for the guidance.

AI Summary

Reverse charge on residential rent requires registered persons to remit GST and creates contested ITC entitlement for employers.
Renting of residential dwellings to a registered person triggers liability on the recipient under the reverse charge framework when the company debits such rent, obliging the company to remit GST and document the reverse charge transaction. Claiming input tax credit on GST paid under reverse charge for employee accommodation is disputed: one view treats employer provided housing as an input for business and eligible for ITC, while another warns that statutory ITC exclusions for supplies used for personal consumption and administrative challenge may result in denial; pragmatic advice includes possible reimbursement structures, reversing ITC defensively, and attention to TDS and documentation requirements.