Place of supply in case of immovable property

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This discussion clarifies the Goods and Services Tax (GST) treatment when a company rents immovable property, specifically a flat for director's residence. It addresses the applicability of Reverse Charge Mechanism (RCM) for registered tenants and confirms that the tenant can indeed avail Input Tax Credit (ITC) on the GST paid under RCM.

CA Parul Saxena

CA Parul Saxena (Querist)

07 March 2025 Company A registered in Delhi taken a flat in NOIDA on rent for director's residence from Company B (registered in Delhi)...Company A is paying IGST on RCM basis for this flat so whether Company A can avail the credit of the GST paid under RCM?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

07 March 2025 If company B is registered under GST, RCM will not apply. Let company B charge GST under FCM.

CA Parul Saxena

CA Parul Saxena (Querist)

08 March 2025 No sir....RCM is applicable...in notification july 2022 Clause 5AA for landlord it is written as 'Any person'...meaning in case of residential properties if tenant is registered then he is liable for RCM irrespective of the fact that landlord is registered or not...My query is different..it is whether tenant can avail ITC or not of this rent paid?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

08 March 2025 Correct, tenant can avail ITC.

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