RCM on Delhi office rent by a Punjab-registered company

Dear Querist

Parent Notification No.13/2017-Central Tax (Rate) was amended vide Notification No. 09/2024-Central Tax (Rate) w.e.f 10-Oct-24 to provide that where the landlord is unregistered the tenant of the commercial property must discharge GST on RCM.

The company has 2 options, viz.,

i) Take registration in Delhi and discharge GST and charge the amount to the revenue statement, or

ii) To avail ITC, the tenant must take ISD and distribute the ITC availed to your Punjab GSTN. W.e.f. 01-04-2025 the cross charge window is not available.

Depending on the materiality of the amount the company will have to take a call.

RCM is payable on the Delhi office rent. The service of renting an administrative/accounting office (a commercial immovable property) by an unregistered individual landlord to your GST-registered company falls squarely under Sr. No. 5AB of Notification No. 13/2017-Central Tax (Rate), effective from 10-10-2024.

Compulsory Registration: Your company is compulsorily required to obtain a separate GST registration in Delhi under Section 24(iii) of the CGST Act, 2017. This is because your company becomes liable to pay tax under RCM in Delhi, irrespective of its aggregate turnover or existing registration in Punjab. As per Sec 2(50) the Delhi Office would become a fixed establishment as it " receives and uses services for its own needs"

GSTIN for Discharge: The CGST and SGST liability under RCM must be discharged using the GSTIN pertaining to your Delhi establishment. This is because the place of supply and the location of the recipient for this service are both in Delhi, making it an intra-State supply.

Yes, your company will be eligible to claim Input Tax Credit (ITC) of the CGST and SGST paid under RCM. This is subject to fulfilling the conditions laid down in Section 16 of the CGST Act, 2017, including the issuance of a self-invoice as per Section 31(3)(f) and payment of tax in cash through the electronic cash ledger.