RCM on Renting of office by Director to Company

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Rajesh

(Querist)
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17 September 2025 Is Company liable to pay GST on RCM basis?
if
1) Director is NOT registered under GST
and
2) lets out office (premises owned by him) to Company

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 September 2025 A company is liable to pay GST on a reverse charge (RCM) basis if it rents a commercial property from an unregistered person, including directors, as per the latest GST amendments effective from October 10, 2024. However, when the property is let out by a director in personal capacity, the RCM liability arises only if the property is commercial, the director is unregistered, and the company is GST-registered.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 September 2025 GST RCM on Rent from Unregistered Directors
Previously, renting of commercial property by a director to the company in personal capacity was not subject to RCM; GST was not applicable if the director was unregistered.

Effective October 10, 2024, GST law has changed. Now, if any unregistered person (including a director) lets out a commercial property to a company that is registered under GST, the company (tenant) must pay 18% GST under RCM.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 September 2025 If the director provides the property as part of his official duties (as remuneration for being a director), RCM always applies.

If the property is let out purely in personal capacity (as a landlord, not as director's official remuneration), the new amendment (effective Oct 2024) specifically brings such transactions under RCM when the property is commercial and the tenant is GST-registered.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 September 2025 From Oct 10, 2024, a GST-registered company must pay GST under RCM on rent paid for commercial premises to an unregistered director.

The director remains unregistered and has no GST obligations or filing requirements for such rent unless their aggregate turnover exceeds the GST threshold.

The company can claim input tax credit (ITC) on the GST paid via RCM if eligible.

Rajesh

Rajesh

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17 September 2025 Thank you very much for kind guidance!

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 September 2025 You are welcome.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 September 2025 Good Luck...

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