Who will be liable to pay GST Demand

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This discussion explores who is liable to pay a GST demand when a building owner rents a property to a hospital for over ₹48,00,000 annually. The owner is unregistered for GST, while the hospital has paid rent as per the agreement. The consensus is that the unregistered building owner is primarily liable for the GST demand due to their failure to register and issue invoices. While the tax burden can be passed on, the owner must first register and issue a proper tax invoice for the hospital to potentially claim input tax credit.

tarun

tarun (Querist)
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06 April 2022 Building Owner giving a building on rent to the tenant (Hospital) and Collecting Rent Rs. 48,00,000/- yearly as per rent agreement signed by both parties.
Building Owner is unregistered in GST and Demand raised against Building Owner but who will be liable to pay that amount. The landlord demanded from Tenant but Tenant said Landlord didn’t issue an invoice to him and Hospital paid rent as per the rental agreement.
Who will be liable to Pay GST Demand?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 April 2022 Hospital paid rent as per agreement. It's the fault of landlord not registered under GST and not issuing tax invoice.
Hence landlord is liable to pay GST demand.

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tarun

tarun (Querist)
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07 April 2022 But the landlord's CA said it's an indirect tax final burden is on the tenant and if the landlord did not collect GST from the tenant, a landlord can recover GST.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2022 Check rental agreement terms.

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tarun

tarun (Querist)
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07 April 2022 On the rental agreement, it's not specified tax included or not. Hospital paid rent after the deduction of TDS.

Udaya Chandran

Udaya Chandran (Expert)
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07 April 2022 Let the owner of the building get GST registered and issue tax invoice for the agreed amount, then the hospital can make payment of GST to the owner and take credit if it is eligible. The owner will proceed to file the GSTR 1 and 3B, making GST payment to the government.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2022 So hospital not liable to pay GST.