Reverse charge on rent paid

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This query is : Resolved

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This discussion clarifies whether a registered tenant must pay GST under the reverse charge mechanism when renting commercial property from an unregistered landlord. The consensus is that reverse charge is not applicable in this scenario, as the landlord's unregistered status means GST cannot be levied. The responsibility for reverse charge, if applicable, always falls on the payer, which in this case is the tenant.

Naveen Kumar Jain

Naveen Kumar Jain (Querist)

16 January 2020 Is reverse charge applicable as per latest rules in following situation:
Land lord is unregistered. Tenant is registered
Property on rent is premises being used as commercial property
Rent is Rs 30000/- per month

CA Anita Bhadra

CA Anita Bhadra (Expert)

16 January 2020 No
Reverse charge is not applicable on rent paid to unregistered person .

Amol S Joglekar

Amol S Joglekar (Expert)

17 January 2020 since landlord is NOT registered under GST, RCM is not applicable

Naveen Kumar Jain

Naveen Kumar Jain (Querist)

17 January 2020 Sir, my query was with tenant's perspective. Whether tenant has to pay GST under reverse charge mechanism?

Amol S Joglekar

Amol S Joglekar (Expert)

17 January 2020 So? What do you think, we are answering from landlord's perspective or what?
Reverse Charge, if applicable, will be applicable to PAYER. Right? So to say the answer is from Payer's perspective. And in your query payer is tenant. Anything else?

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