GST can be refund or reverse ?

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This query is : Resolved

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This discussion addresses a landlord's concern about paying 18% GST on rental income when the tenant has not paid the rent. While the tenant might reverse their Input Tax Credit (ITC) if payment isn't made within 180 days, the landlord's GST liability remains. The landlord cannot claim a refund of the GST already paid. Their best recourse is to adjust invoices, if possible, to show rent as inclusive of GST, thereby reducing the taxable amount and mitigating their loss.

tarun

tarun (Querist)

08 April 2022 The landlord paid 18% Gst (Rs.90000/-) on rental Income (Rs.500000/-)but the tenant did not pay any amount to him. What is the treatment from the Landlord's point of view - Can avail refund?

PARAS CHHAJED

PARAS CHHAJED

(Expert)

08 April 2022 Whether tenant pays GST r not that does not make any difference as far as GST liability of the landlord is concerned. At the most the landlord may make the rent inclusive of GST and accordingly the taxable rent would be Rs.42,373 on which he would be paying GST @18%

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tarun

tarun (Querist)

09 April 2022 Sir if the Tenant didn't pay any amount in that case what is the remedy for the landlord bcoz he was paid GST from his own pocket?
The tenant will reverse ITC if payment is not made within 180 days but What's the Landlord's side?

CA Puja Sharma

CA Puja Sharma (Expert)

09 April 2022 Yes, the landlord cannot claim a refund of GST.
He can modify the invoices if GST returns have not been filed and mark the rent as inclusive of GST to save the tax loss.

tarun

tarun (Querist)

09 April 2022 But tenant didn't pay any amount.

CA Altamush Zafar

CA Altamush Zafar (Expert)

11 April 2022 The non payment by tenant is a violation of rent agreement. However the services are being provided therefore the tax liability will remain on the landowner.

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