GST On Renting of Immovable Property

Divyanshu Sharma | Last updated: 29 May 2023

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Quick Summary

This article clarifies the Goods and Services Tax (GST) implications for renting both residential and commercial properties. It details when GST applies to residential dwellings, depending on whether they are used for commercial or personal purposes, and by registered or unregistered individuals. For commercial properties like shops and godowns, GST is generally applicable if the owner is registered.

In this article, we will discuss renting of both commercial & residential property.

1. GST on Renting of Residential Dwelling

A) If the residential dwelling is used for commercial purpose like office then GST is payable on Forward charge basis.

GST on Renting Property: Residential and Commercial Guide

B) If the residential dwelling is used for personal purpose then the service is exempt for both registered & unregistered.

C) If a Residential dwelling is used for commercial purpose but as a residence i.e Guest house etc. by registered person then it’s taxable under RCM.

D) If a Residential dwelling is used for commercial purpose but as a residence i.e Guest house etc. by unregistered then it is exempt.

Renting of Immovable Property

2. Renting of Commercial Property. (Shop, Godown)

A) GST is payable under forward charge if owner is registered under GST.

B) GST not leviable If owner is unregistered.

FAQ :

Yes, if a residential dwelling is used for a commercial purpose, such as an office, GST is payable on a forward charge basis.

GST is exempt for residential dwellings used for personal purposes, regardless of whether the tenant is registered or unregistered.

If a residential dwelling is used as a residence for commercial purposes, like a guest house, by a registered person, it is taxable under the Reverse Charge Mechanism (RCM). However, it is exempt if used by an unregistered person.

GST is payable under forward charge if the owner of a commercial property (shop, godown) is registered under GST. If the owner is unregistered, GST is not leviable.