GST: As per the new GST rules from now on Tenants will have to pay Goods and Services Tax (GST) of 18% for renting a residential property. The rules will be applied from July 18, 2022. However, the government later clarified that the GST will only be applied when the residential unit is rented out to salaried people
On Friday, the government clarified that GST will not be applied for residential units if they are rented out for private use or living purpose. “No GST when it is rented to a private person for personal use. No GST even if proprietor or partner of firm rents residence for personal use,” the government said.
Must read: Income Tax Raid in Maharashtra: Tax Officials Dressed As “Baaraati”
Have a look at what you need to know about the new GST rule applied to tenants:
- Tenants registered under the GST regime are now required to pay 18 per cent tax for renting a property for commercial purposes. The property owner is not liable to pay the GST.
- A tenant, who offers services from a rented residential property, will be liable to pay 18 per cent GST tax.
- A tenant will be liable to pay tax under the Reverse Charge Mechanism (RCM). The tenant can claim the GST paid under Input Tax Credit as a deduction.
- GST-registered tenants include individuals and corporate entities.
- GST registration is mandatory for persons carrying out business or profession of annual turnover above the threshold limit.
- The new GST rule will impact the companies and professionals who have taken residential properties on rent or lease.
- Earlier, only commercial properties like offices or retail spaces given on rent attracted GST.
Must read: Corporate tax cut lowers tax intake; Delhi CM Arvind Kejriwal reacts
For all the news update subscribe our YouTube channel ‘DNP India’. You can also follow us on FACEBOOK, INSTAGRAM and TWITTER.
 of 18% for renting a residential property){kind=link}