RCM ON SHOP RENT

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This query is : Resolved

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A small trader with a turnover of 1.5 crore per annum and paying £8000 per month in shop rent is seeking clarification on whether they need to pay tax under the Reverse Charge Mechanism (RCM). While some online articles suggest an exemption up to £10,000 per month, the trader requires official government confirmation. The advice provided indicates that RCM is not applicable to rent paid for commercial properties, only for residential properties rented by registered entities.

Jiwan singh

Jiwan singh (Querist)

24 July 2022 SIR, I AM A SMALL TRADER WITH TURNOVER 1.5 CRORE P/A , I PAY RENT OF MY SHOP 8000 PER MONTH, WILL I PAY TAX ON 8000 UNDER RCM ? . I AM CONFUSED BECOUSE THERE ARE MANY ARTICLES ON NET SOME ONE SAYS THAT RENT IS EXEMPT UPTO 10000 PER MONTH BUT I CAN NOT FIND ANY GOVT CIRCULAR , IF EXEMP PLZ PROVIDE NOTIFICATION OR CIRCULAR, IF NOT EXEMP PLEASE GUID ME.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 July 2022 No such exemption available.

Udaya Chandran

Udaya Chandran (Expert)

25 July 2022 RCM is not applicable on rent paid for shop if it is commercial property. RCM is applicable only when the residential property is taken on rent by the registered person.

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