Gst on residential rent with effect from 18/7/2022

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From 18th July 2022, GST-registered individuals renting residential property for personal use are liable to pay GST under the Reverse Charge Mechanism (RCM) at 18%. While this is an expense, registered dealers can claim Input Tax Credit (ITC) for it. The rental is considered a supply under the same PAN as the proprietorship firm, simplifying accounting by treating it as a business expense for RCM purposes, even if the rental agreement is in a personal name.

ARUN GUPTA

ARUN GUPTA (Querist)
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19 July 2022 I am a gst registered person and paying rent of Rs1924/ for my resident. Will I have to pay reverse gst on rent from 18/7/2022.please clarify in details the notifications?

ARUN GUPTA

ARUN GUPTA (Querist)
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19 July 2022 Pl clarify new rules regarding this?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 July 2022 As you are registered dealer, and taken residential unit on rent, you are liable to pay GST @ 18% on RCM, while you are eligible to claim ITC over it.

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ARUN GUPTA

ARUN GUPTA (Querist)
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19 July 2022 This residential unit have been taken by me since 2019 and is in my personal name. How will I pay RCM charges? From which date I will be required to pay rcm charges? Please clarify?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 July 2022 Only now onward; i.e. from 18/07/2022, from when the amendment to the act applies.

ARUN GUPTA

ARUN GUPTA (Querist)
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19 July 2022 So rental bill is in my personal name and gst we are depositing in my proprietorship firms name. How will we show this in our books of accounts?

ARUN GUPTA

ARUN GUPTA (Querist)
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19 July 2022 We are unable to understand how to show all the get which is in my personal name. A explanation from your end will help us a lot.

ARUN GUPTA

ARUN GUPTA (Querist)
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19 July 2022 We need to know the process how to show this residential rental to the proprietorship firm for RCM GST PURPOSES.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 July 2022 Be clear that you as individual and or the proprietorship firm is one and single entity. The rental income is also one of the supply under same PAN. So, need not get confused as how the rental income be shown in firm's income. Just consider it under PAN & follow the compliance, as the case is in IT return.

ARUN GUPTA

ARUN GUPTA (Querist)
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19 July 2022 But I am paying rent for my residential stay. This rent paid by me is not income for me. It is expense for mr

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 July 2022 It is not under Income tax act.
As per GST act, you are consuming rental service, so you need to pay GST.
When ITC is allowed even for residential usage, you are not at any loss.

ARUN GUPTA

ARUN GUPTA (Querist)
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19 July 2022 Yes you are right but unnecessary paper work will increase

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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20 July 2022 In this computerized age, addition of one more entry per month will be negligible.

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