RCM on Delhi office rent by a Punjab-registered company

[Keshew Aggarwal]

A private limited company is GST registered only in Punjab, where its manufacturing plant is located and all outward supplies are made from Punjab.

The company also has an administrative/accounting office in Delhi, but no supply is made from Delhi and the company does not have a separate GST registration in Delhi.

The company pays approximately Rs. 6 lakh annual rent for the Delhi office to an individual landlord who is not registered under GST.

My query is whether RCM is payable on the Delhi office rent, considering that:

• The property is situated in Delhi.

• The landlord is an unregistered individual.

• The recipient company is registered only in Punjab.

• The Delhi office is used only for administrative/accounting purposes.

• No taxable supply is made from Delhi.

If RCM is not payable, kindly clarify the relevant provisions/notification supporting the same.

If RCM is payable, please clarify under which GSTIN it should be discharged and whether the company can claim ITC of the RCM paid.

Please guide with reference to the relevant provisions of the CGST/IGST Act and applicable RCM notifications.

AI Summary

Reverse-charge GST on commercial rent from unregistered landlords requires local registration or ISD-based input tax credit distribution.
Reverse-charge GST applies to commercial-property rent paid to an unregistered landlord, including where a company registered only in Punjab uses a Delhi office solely for administration and makes no local outward supplies. Compliance may be achieved through Delhi GST registration and payment of reverse-charge tax. Input tax credit may be availed and distributed to the Punjab GSTIN through the Input Service Distributor mechanism; cross-charge is unavailable from 1 April 2025.