GST EXEMPTION ON COMMERCIAL RENT INCOME

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This discussion clarifies GST obligations for builders and developers renting out unsold flats. If the property is used for residential purposes by the tenant, the rental income is generally exempt from GST. However, if the builder's total annual turnover across all their businesses exceeds ₹20 lakh, they are required to collect and pay GST, regardless of the property's use.

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
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15 October 2020 Respected Sir,

Kindest regards to all of you.

Please guide me and oblige.

Basically I am a builder and developer. I have few unsold flats also which I have given on Rent. Total Rental Income is below Rs 10 lacs yearly during the financial year 2018-19. Whether should I collect 18% GST from my tenants or I am totally exempted from GST on such a rental income of Rs 10 lacs yearly.

Lekhraj sood

Lekhraj sood (Expert)
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15 October 2020 No, you are not exempted if your total turnover of all businesses including of builder and developer is exceeding 20 lakh rupees. You have to charge GST on renting services if you are register/covered under gst.

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
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15 October 2020 Soodji Regards

I am highly obliged and grateful for your guideline.

CA Altamush Zafar

CA Altamush Zafar (Expert)
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15 October 2020 If the use of flat is for residence by the tenant then because flat is a residential property and the use is for residence then rent for such residential property is exempt

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
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15 October 2020 Thanks with kindest regards for your guideline.

Lekhraj sood

Lekhraj sood (Expert)
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15 October 2020 Title of the query mentions commercial rental income. If property is used for commercial purpose by the tenant then it is taxable and exempted if used for residential purpose.

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
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15 October 2020 Thanks sood ji for your guidelines.

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