Acting as an Agent

Save Share

This query is : Resolved

Quick Summary

This discussion clarifies whether a GST-registered company must pay GST under the Reverse Charge Mechanism (RCM) when paying house rent for an employee. Even if the rental agreement is between the landlord and employee, the company is liable if it effectively covers the expense and the employee acts as an agent. This reimbursement is considered a perquisite and is not exempt from GST.

Rajkumar Gutti

Rajkumar Gutti (Querist)

08 November 2025 We are gst registered company. Paying house rent to employee. Rent is debited to rent account. House agreement is between landlord & employee.
Paid house rent company consider as perqisite.
Is company payable gst rcm as per sec. 2 (93 ) C cgst ( employee acting as an agent on behalf of company )

Please guide

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

08 November 2025 Yes, your company is liable to pay GST under the Reverse Charge Mechanism (RCM) on rent paid for a residential property provided to an employee, even if the rental agreement is between the landlord and the employee, provided the company is effectively acting as the recipient and reimbursing/covering the expense.

Rajkumar Gutti

Rajkumar Gutti (Querist)

08 November 2025 धन्यवाद सर, Thanks sir🌹🌹q

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

08 November 2025 You are welcome.

Rajkumar Gutti

Rajkumar Gutti (Querist)

14 November 2025 Sir in above who is an agent and who is pricipal

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

14 November 2025 Employee is working as agent to principal company.

Rajkumar Gutti

Rajkumar Gutti (Querist)

15 November 2025 Sir, one more question is there remain-
Is here apply employer - employee relationship, hence
Exempt this rent reimbursement to employee.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

15 November 2025 It is not exempt, but counted as perquisites.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now