TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1623
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.... residential dwellings from various unregistered persons. The total rent paid for such dwellings is approximately Rs. 6,00,000/- per month. As per the provisions of Notification No. 5/2022-Central Tax (Rate) dated 13th July 2022, services by way of renting of residential dwellings to a registered person are liable to Goods and Services Tax (GST) under Reverse * Charge Mechanism (RCM). Accordingly, the applicant, being the registered recipient, is liable to discharge GST under Section 9(3) of the CGST Act, 2017. The applicant submits that, based on this provision, they are required to pay approximately Rs. 1,00,000/- per month under RCM. In this context, the applicant seeks a ruling on the correct legal position regarding their liability to pay GST under RCM on the rent paid for residential dwellings taken from unregistered persons for use as staff quarters. 4.2. The applicant refers to sub-sections (3) and (4) of Section 9 of the Central Goods and Services Tax (CGST) Act, 2017, concerning the applicability of Reverse Charge Mechanism (RCM), and also cites Notification No. 5/2022-Central Tax (Rate) dated 13.07.2022. The applicant submits that, in terms of Section 7(2)(a) of the C....
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....nt was granted opportunity for personal hearing on 21-06-2024 and a rehearing was conducted on 20/06/2025 due to the change of Central and State members. Sri. Stanly James, Chartered Accountant represented for the applicant in personal hearing. In the hearing, he reiterated the contentions in the application. 7. Discussion and Findings: 7.1. We have carefully examined the application, the statement of facts submitted, and the arguments put forth during the personal hearing. The questions on which the applicant seeks an advance ruling fall within the scope of clauses (b) and (e) of sub-section (2) of Section 97 of the Central Goods and Services Tax (CGST) Act, 2017. 7.2. The applicant has submitted that it provides staff quarters to its employees by entering into rental agreements with various unregistered persons for residential dwellings. Thus, there are two transactions involved, the first being the renting of houses by various land lords to the applicant and then letting of these houses by the applicant to their employees. The letting of the houses by the applicant to their employees is certainly in the nature of employer-employee relations. However, such a character do....
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....th July 2022 by Notification No. 5/2022-Central Tax (Rate), is reproduced as follows: Sl. No. Category of Supply of Services Supplier of service Recipient of Service 5AA Service by way of renting of residential dwelling to a registered person. Any person Any registered person. As per the above entry, it is obvious that GST on Service by way of renting of residential dwelling to a registered person shall be payable under sub-section (3) of section 9 of the CGST Act, 2017 as reverse charge by the registered recipient, i.e, the applicant. 7.5. Further, it was examined whether the provision of accommodation by the employer, i.e., the applicant, to its employees constitutes a "supply" under GST. In this regard, reference has been made to Circular No. 172/04/2022-GST, dated July 6, 2022, issued by the GST Policy Wing of the CBIC. Specifically, as per the clarification provided under serial number 5 of the aforementioned circular, the following points have been elucidated: Question: Whether various perquisites provided by the employer to its employees in terms of contractual agreement entered into between the employer and the employee are liable for ....
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....T. As per Section 17 (2), Where the goods or services or both are used by the registered person partly for effecting taxable supplies and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies. Therefore, if the final supply is an exempt supply, the tax payer is not eligible for ITC in respect of inputs or input services used for making such an exempted supply. As per Section 2 (47) of the CGST Act, 2017, (47) "exempt supply means ... and includes non-taxable supply". Therefore, a non-taxable supply, i.e., a supply outside the purview of GST, is an exempt supply and therefore, the supply of residential units by the applicant to their employees is an exempted supply. Therefore, Section 17 (2) read with Section 2 (47) makes it amply clear that the applicant is not eligible for ITC on the RCM paid by them on residential units taken from various landlords on rent. 7.8. Therefore, Section 17 (2) read with Section 2 (47) makes it amply clear that the applicant is not eligible for ITC on the RCM paid by them on residential units taken from various landlords on rent in....