Notional RENT GST Applicability

[K Balasubramanian]

I am the owner of commercial space. I am using this space for my CA FIRM and I do not charge any rent. Is GST payable under RCM from 10/10/2024 on notional rent?

[KASTURI SETHI]

Dear Sir,

The following decision of AAR can be useful to arrive at concrete decision:-

2022 (2) TMI 1105 - AUTHORITY FOR ADVANCE RULING, TAMILNADU - IN RE : SHANMUGA DURAI

 

[Shilpi Jain]

Related party transaction. 

What is the GST registration status of firm and yours?

If both are unregistered - no GST liability.

[KALLESHAMURTHY MURTHY K.N.]

Sir, 

The commercial space in individual name is provided free of cost to your CA Firm. So there is a relationship of distinct persons. Since the commercial space is provided for the furtherance of business, GST is attracted. The property owner is liable to pay GST under RCM and therefore mandatorily required to obtain registration. The notional rent can be valued based on market value or under Rule 30 or 31 and pay taxes accordingly. 

AI Summary

Free Commercial Space Rental: GST Implications for Property Owners Providing Complimentary Business Premises Under Reverse Charge Mechanism A commercial property owner inquired about GST applicability for a commercial space provided free of cost to a CA firm. Responses suggest potential GST liability under reverse charge mechanism if the space is used for business purposes, with tax calculated based on notional market rent. Registration may be mandatory depending on the parties' GST status and transaction nature.