RCM on rent Composition tax dealer

[KS Bhat]

Sir/Madam

1. Composition Tax dealer need to pay GST under RCM on rent payment to unregistered owner ?

2. Can Mutual fund distributor can opt composition scheme ?

3. Can GST registered as regular can opt composition scheme any time during the year ?  

 

AI Summary

Composition dealers must pay 18% GST on rent to unregistered owners under Reverse Charge Mechanism A composition tax dealer inquired about GST obligations regarding rent payments to unregistered owners, mutual fund distributor eligibility for composition scheme, and mid-year scheme switching. One respondent clarified that composition dealers must pay GST under Reverse Charge Mechanism at 18% on business property rent to unregistered owners, with no input tax credit available. Mutual fund distributors were deemed ineligible for composition scheme due to TDS deduction requirements under Section 52 of CGST Act, which disqualifies them per Section 10(2)(d). The respondent confirmed that switching to composition scheme mid-year is prohibited, requiring Form GST CMP-02 filing before March 31st of the preceding year, with turnover limits of ₹1.5 crore for goods or ₹50 lakh for services. Another respondent referenced notification 07/2025 suggesting no RCM applies to the first query.