GST on un-realized rental income
06 April 2020
I have a query regarding tax incidence under GST in respect of rented commercial property. Following are brief facts:
1) Commercial property is let-out on 01/04/2019 under written registered deed of rent.
2) Tenant keeps on paying rent for April-May-June, 2019 and stops paying rent thereafter.
3) Landlord issues invoice on 1st of every month i.e. for rent payable for April 19, invoice is issued on 1st April 2019 and is due for payment on 10th of April.
4) After rigorous chase with the tenant for 3 months, landlord fails to realise rent.
5) It is clearly provided in the registered rent deed that in case rent is not paid for one month, landlord has the right to evict the tenant and upon issue of notice by the landlord, tenant is presumed to occupy the rented premises illegally. Accordingly, eviction notice is issued on 30th of September 2019 and court case is also initiated in November 2019.
6) Landlord continues to issue rental invoice from July'19 to September 2019 and deposits GST with the government.
7) No rental invoice is issued from October 2019 onwards post issuance of eviction notice and GST is also not deposited for a period from October 2019 to March 2020.
8) Court proceedings are pending till now and no interim order has been passed by the court.
You are humbly requested to guide on following points: -
a) Is it correct on the part of the landlord to not issue invoice from Oct'19 to Mar'20 under GST Law?
b) Is landlord entitled to claim refund of GST paid for the period from July'19 to Sept'19 i.e. the period for which rent remains unrealised?