GST on Renting of Residential Property

The decision to bring the renting of residential dwellings under the tax was taken in the 47th GST Council Meeting. Renting an immovable property is considered a supply of service.

Rate of GST on Rent and it's applicability :

GST on Rent is taxed @ 18% of the Rent paid. However, it is important to note here that GST is levied on Renting of Commercial Property and also Renting of Residential Property.

1) Any person who is providing services by way of renting of residencial dwelling to a registered person GST is applicable on RCM basis, in the hand of the recipient (Tenant) and rate of GST would be 18% effective from 18/07/2022.

2) Provided further that any person whether registered or not registered providing services by way of renting of residencial dwelling to any person who (tenant) is not registered than it will be exempted.

3) When a registered person rents a residential property for business purposes, it will be treated same to a commercial unit. If the landlord is unregistered then GST shall not be levied and paid by either the landlord or the tenant. If the landlord is registered GST will be charged on forward charge basis and the recipient can take the ITC of the same.

• The exemption has been withdrawn vide :CGST(Rate) Notification no. 04/2022 dated 13.07.2022.
• Same has been notified under RCM vide: CGST(Rate) Notification no. 05/2022 dated 13.07.2022.
• Liability to pay GST will not arise as it continues to be specifically exempted vide: CGST (Rate) Notification no. 12/2017  dated 28.06.2017

It is important to mention here that GST liability would remain intact as long as you have given your property on rent for business, irrespective of the nature of its usage.