TaxTMI 
TaxTMI 
Reverse Charge - Renting of Residential Premises
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....everse Charge - Renting of Residential Premises<br> Query (Issue) Started By: - Kaustubh Karandikar Dated:- 16-9-2022 Last Reply Date:- 8-12-2022 Goods and Services Tax - GST<br>Got 8 Replies<br>GST<br>Two Directors of XYZ Pvt. Ltd. are owning a Residential Premises. These directors are also staying in the same premises. Rent for the premises is paid by XYZ to both the directors. Whether XYZ is li....
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....able to pay GST on the same under reverse charge as per the new provisions introduced? Reply By Manoranjan Behera: The Reply: Hi The GST has to be discharged by the XYZ Pvt Ltd under RCM as per the new provision. (05/2022/ Central Rate/13-07-2022), as it satisfies the condition of the notification and the fact that the same has been used by the directors or any other person is irrelevant here. ....
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.... Reply By Manoranjan Behera: The Reply: Sorry...Since it is a residential property and used for Residential purpose, it is covered in the exemption notification No-12/2017. Hence no GST is applicable. Reply By PAWAN KUMAR: The Reply: Dear sir, GST will be payable under RCM. by XYZ Pvt. Ltd. Reply By KASTURI SETHI: The Reply: If residential property is supplied to a registered person, it is ....
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....taxable. Registered person means engaged in taxable business. Hence XYZ is liable to pay GST under RCM. Reply By Shilpi Jain: The Reply: In case the amount paid to the Directors is not in the nature of rent but as part of the remmuneration to them, no GST will be applicable. LIability under RCM is only when rental service is provided to the registered person. Reply By KASTURI SETHI: The Reply:....
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.... Yes, Madam but the word,'rent' is mentioned in the query. Reply By Ganeshan Kalyani: The Reply: RCM is applicable as an unregistered person (Directors) has given their residential unit to registered person (XYZ Pvt. Ltd). RCM is payable by XYZ Pvt Ltd. Reply By Nikhil Virkar: The Reply: In my view two separate transaction are involved in this case (1) Between Landlord and Directors a....
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....nd (2) Between Directors and XYZ Ltd.. Director pays to Landlord and I believe gets reimbursement from XYZ, which may be in form of remuneration. Hence (a) if Directors are registered persons in their individual capacity they are liable to pay tax under RCM, else not (b) if Directors are unregistered, exemption from payment of tax to landlord since residential use (c) There is no as such direct tr....
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....ansaction between Landlord and XYZ Ltd., hence XYZ is not liable to pay tax under RCM. (d) Transaction between XYZ and Directors are under employee-employer relationship and hence transaction is out of tax net as per Schedule III. Hope Sir and Madam you are aligned. Please let me correct in case my interpretation is incorrect. Regards, Nikhil Virkar<br> Discussion Forum - Knowledge Sharing ....