One of the clients- a dealer registered under GST- is running his business in a shop taken on lease for 8 years by paying Rs 8 lakhs as the lease amount. As per the terms of lease, this amount will be refunded by the Lessor after the lease period.
Whether GST RCM on rent is applicable on this case? If yes, how to calculate monthly rent / RCM?
GST Reverse Charge Mechanism Applies to Unregistered Lessor Rent Payments with 18% Tax on Lease Transactions A registered dealer leased a shop for 8 years, paying Rs 8 lakhs as a refundable security deposit. The discussion explores GST Reverse Charge Mechanism (RCM) applicability on rent. Key points include: security deposits are not considered rent unless adjusted, GST at 18% applies if lessor is unregistered, and lease terms determine tax treatment. The arrangement depends on specific contractual details and whether the deposit impacts rental value. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
