GST ON RENTING OF COMMERCIAL SPACE

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This query is : Resolved

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A proprietorship, registered as a Goods Transport Agency (GTA), is seeking advice on how to handle GST for renting out commercial space. Previously using the Reverse Charge Mechanism (RCM), they have now opted for the Forward Charge Mechanism (FCM). The core question is whether they can use Input Tax Credit (ITC) from their GTA business to offset the GST liability on rental income, given that rental income is not part of their GTA operations.

Shalini RN

Shalini RN (Querist)
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15 May 2023 Dear Sir/Madam,

Ours is a Proprietorship concern and we are registered GTA. Our proprietor has rented out commercial space and raises the Rental Invoice under the GST number of our business i.e., Transportation of Commercial vehicles. Upto last financial year we were in RCM method and paid the GST charged to Tenants on monthly rent through cash. But for current financial year we have opted FCM. Now my query is whether can we set off the liability of GST payable which is charged to Tenants against the ITC of purchases made for GTA Business as rental income from renting out of commercial space does not form part of GTA business.

Thank you,