Rent collected from employees for renting out the residential quarters of factory will attract GST under RCM

[Venkata K]

Dear Sir 

we are collecting rent of Rs. 3500/- for one residential quarters located near factory to our employees whether Registered dealer has to remit GST under RCM 

 

[Sadanand Bulbule]

Refer Entry No.12 of Notification No. 12/2017-CTR dated 28/06/2017 which provides exemption of tax on the following services.

12

Heading 9972

Services by way of renting of residential dwelling for use as residence except where the residential dwelling is rented to a registered person.

The property must be a residential dwelling for exclusive use as a residence only.  Hence there is no need to pay tax under RCM.

 

[Shilpi Jain]

If employee is not registered under GST, no RCM - another aspect to note.

[Venkata K]

Madam 

If the employee is registered and it Industrial quarters are taken on rent for residential purpose is also falls under RCM. 

AI Summary

Company renting residential quarters to employees questions GST liability under Reverse Charge Mechanism for monthly rent collection A company collects Rs. 3,500 monthly rent from employees for residential quarters near their factory and inquires about GST liability under Reverse Charge Mechanism (RCM). One expert cites Notification No. 12/2017-CTR Entry 12, which exempts residential dwelling rentals from GST except when rented to registered persons. The expert concludes no RCM applies since the property is exclusively residential. Another expert clarifies that RCM only applies if the employee is GST-registered. The original querist responds seeking clarification about whether industrial quarters rented for residential purposes to registered employees would still fall under RCM, indicating uncertainty about the intersection of property type, usage purpose, and tenant registration status in determining GST obligations.