RCM on rent

[manish kataria]

Hi, I am running a retail shop in a residence where ground floor has been converted into shop and on the first floor the landlord is living. He pays property tax in mixed category ie ground floor tax as commercial and first floor tax as residential tax.I have opted for composition scheme under GST. In light of new notification wherein composition dealers are exempted to pay RCM on renting of commercial property, am I liable to pay RCM. My interpretation is that I am on a commercial property, so I should not pay RCM as I am a composition dealer

AI Summary

Retail Shop Owner Exempt from Reverse Charge Mechanism on Commercial Property Rent Under GST Composition Scheme. A retail shop owner operating under the GST composition scheme inquires about the applicability of Reverse Charge Mechanism (RCM) on rent for a commercial property. The shop is on the ground floor of a building, classified for tax purposes as commercial, while the landlord resides on the first floor. Three respondents clarify that, according to recent notifications, composition dealers are exempt from paying RCM on renting commercial properties. The shop owner, therefore, is not liable to pay RCM, as the ground floor is used for commercial purposes and the landlord is unregistered.