TaxTMI 
TaxTMI 
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 ?
RCM on rent Composition tax dealer
17 Jul 2025 
2 Replies 
2178 Views Asked by
Reverse charge on rent: advice conflicted on applicability for composition taxpayers; composition entry rules remain restricted.
One advisory view advises that a composition dealer must pay GST under the Reverse Charge Mechanism on rent paid to an unregistered owner and cannot claim input tax credit; another advisory reference cites a notification stating RCM does not apply. Mutual fund distributors are treated as ineligible for the Composition Scheme due to disqualifying receipt/deduction arrangements. Taxpayers cannot opt into composition during the financial year and must file the prescribed form before the year begins, subject to turnover conditions. (AI Summary)
One advisory view advises that a composition dealer must pay GST under the Reverse Charge Mechanism on rent paid to an unregistered owner and cannot claim input tax credit; another advisory reference cites a notification stating RCM does not apply. Mutual fund distributors are treated as ineligible for the Composition Scheme due to disqualifying receipt/deduction arrangements. Taxpayers cannot opt into composition during the financial year and must file the prescribed form before the year begins, subject to turnover conditions. (AI Summary)