Rent under RCM

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This discussion clarifies the application of GST on rent for commercial premises. If the premises are used for residential purposes, GST is applicable on a Reverse Charge Mechanism (RCM) basis, even if a firm uses it commercially. However, for purely commercial spaces, GST is typically applied under the forward charge mechanism.

Aparna

Aparna (Querist)

29 July 2022
I am a partner in one firm(Tenant). Firm paid per month 30000 rent for the use of my(Owner) premises.

The firm (Tenant) uses these Premises for commercial purposes .

I (Owner)am not registered under GST.

Then my question is RCM is required to be paid by the firm as per new rule of rent 13.07.2022?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

29 July 2022 Yes, under RCM ..

Aparna

Aparna (Querist)

30 July 2022 Sir,
How to RCM applicable can you please explain? it is not use for residential purpose and notification number 05/2022 CGST Dt. 13-07-2022 is said about residential.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 July 2022 If its residential premises, then GST on RCM basis will apply, even if firm uses it for commercial purpose. But if its commercial space, then GST applies under forward charge.

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