RCM & GST Registration - Employee Site Accommodation

21 Sep 2026

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Asked by

Nikhil Kamble

Reverse-charge treatment of employee accommodation depends on whether the employer rents directly or reimburses employee-incurred rental expenses.
Where a GST-registered employer directly rents accommodation for employees from unregistered providers, GST liability may arise under the reverse charge mechanism. Where the employee independently enters the rental agreement and the employer reimburses the expense, the stated view is that RCM does not apply to the employer. Including accommodation value as a salary perquisite is also suggested, subject to consideration of income-tax implications. No definitive basis is provided for State-wise GST registration solely because of RCM exposure. (AI Summary)

A company has construction sites across various States and arranges rented accommodation for employees working at these sites. The landlords/accommodation providers are generally unregistered under GST.

If GST under RCM is applicable on such rentals, does the company need to obtain GST registration in every State solely due to this RCM liability?

Can the company instead provide accommodation as part of the employees' salary or reimburse accommodation expenses incurred by employees, and would such arrangements avoid RCM and State-wise GST registration?

What is the most compliant way to structure this arrangement without obtaining GST registration in every State?

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