GST ON RENT UNDER COMPOSITION SCHEME

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If you are registered under the GST composition scheme and paying rent to an unregistered person, you are liable to pay GST under the Reverse Charge Mechanism (RCM) at an 18% rate. This RCM rule applies to residential property rent regardless of the landlord's registration status since July 18, 2022. For commercial property, RCM is applicable only if the landlord is unregistered; if the landlord is registered, GST is charged on a Forward Charge basis.

shivam

shivam (Querist)
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14 October 2024 I am registered Person under GST composition scheme.

If I pay rent to an UNREGISTERED person then who will be liable for PAY GST?

Will I have to pay tax at the rate of 18% on rent in Cmp-08?

Please reply

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 October 2024 Yes, you have to pay GST under RCM at the rate of 18%.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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15 October 2024 RCM on residential house property was introduced w.e.f. 18.7.22. For which RCM is payable by registered person irrespective of landlord is registered on it.
Likewise RCM on commercial property was introduced w.e.f. 10.10.24 for which RCM is payable by a registered person only if the landlord is unregistered. If landlord is registered then no RCM is applicable, GST will be charged on FCM basis.

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