TaxTMI 
TaxTMI 
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?
Eligibility to ITC for tax paid under RCM on rented commercial property
12 Oct 2024 
4 Replies 
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Input tax credit on reverse charge payments is unavailable where the taxpayer makes exempt supplies.
Tax paid under the Reverse Charge Mechanism is treated on the same footing as tax paid under a supplier's invoice for ITC purposes, but eligibility depends on the nature of the recipient's supplies; where the premises are used to make exempt supplies, Input Tax Credit is not available and cannot be utilised for such exempt-output activity. (AI Summary)
Tax paid under the Reverse Charge Mechanism is treated on the same footing as tax paid under a supplier's invoice for ITC purposes, but eligibility depends on the nature of the recipient's supplies; where the premises are used to make exempt supplies, Input Tax Credit is not available and cannot be utilised for such exempt-output activity. (AI Summary)