Eligibility to ITC for tax paid under RCM on rented commercial property

[KALLESHAMURTHY MURTHY K.N.]

Dear Sirs,

Mr X, a registered person, used a commercial property for exempted supplies and paid rent to an unregistered person (Land Lord). Whether X is liable to pay tax under RCM and can avail of ITC paid under RCM as per Notification 9/2024?

AI Summary

Liability of Mr. X to Pay Tax Under Reverse Charge Mechanism and ITC Eligibility for Exempted Supplies Discussed A registered individual, Mr. X, used a commercial property for exempted supplies and paid rent to an unregistered landlord. The discussion revolves around whether Mr. X is liable to pay tax under the Reverse Charge Mechanism (RCM) and if he can avail of Input Tax Credit (ITC) for tax paid under RCM according to Notification 9/2024. Responses indicate that since Mr. X provides exempted services, he is not eligible for ITC. The eligibility for ITC does not differentiate based on whether tax is paid under RCM or through a tax invoice, but exempted supplies do not qualify for ITC.