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Commercial rental income under gst

Rajeev Kumar (Owner) (54 Points)

24 June 2017

If turnover of Properitorship firm is more than 75 lacs with intersate sale/purchase & the Rental income from Commercial property of same Individual(Properitor of firm) is less than 10lacs or 20lacs i.e below the exemption limit.

What will be the rate of GST on rental Income ?

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14 Replies

Dhrubashis Roy (4 Points)
Replied 24 June 2017

18 percent

Rajeev Kumar (Owner) (54 Points)
Replied 24 June 2017

Why Sir ?

Rental income is below the exemption limit.

Originally posted by : Dhrubashis Roy
	18 percent

Raghuveer (Executive) (167 Points)
Replied 24 June 2017

The proprietor and his proprietary firm are not considered as distinct persons. Hence the rental income on renting of commercial property shall also be considered as the income of the proprietary firm. As the firm has already exceeded the threshold limit for registration, all supplies made by it shall be taxable. Accordingly, the rental income shall also be chargeable to 18% GST.

1 Like

Lalit Nagpal (Assistant Manager) (541 Points)
Replied 24 June 2017

Agreed with Mr Raghuveer

Rajeev Kumar (Owner) (54 Points)
Replied 24 June 2017

Originally posted by : Raghuveer
	The proprietor and his proprietary firm are not considered as distinct persons. Hence the rental income on renting of commercial property shall also be considered as the income of the proprietary firm. As the firm has already exceeded the threshold limit for registration, all supplies made by it shall be taxable. Accordingly, the rental income shall also be chargeable to 18% GST.

Thanks

Rajeev Kumar (Owner) (54 Points)
Replied 24 June 2017

Sir one more query is there, if it is a Partnership firm/ Pvt. Ltd company & Partner/Director is getting rental income below exemption limit then what will be the status of GST ?

Dev Kumar (Accounts Manager) (102 Points)
Replied 24 June 2017

GST regn is based on PAN no.

All income will be considered for a pan no., whether it's of individual or firm or company.

Rajeev Kumar (Owner) (54 Points)
Replied 24 June 2017

Originally posted by : Dev Kumar
	GST regn is based on PAN no. All income will be considered for a pan no., whether it's of individual or firm or company.

Agreed its pan based.

Sir you mean to say if total income(from firm + rental income) of partner/director crosses the threshold limit then partner/director shall charge GST.

Raghuveer (Executive) (167 Points)
Replied 25 June 2017

Unlike proprietorship, the income from partnership and company are not considered as income of the partner or director. In the case of companies, the company has a separate legal entity.

In these cases, if the rental income were to be received by the partner/director in his individual capacity and the firm/company derives other business incomes, the partner's/director's income alone would have to be considered for determining if the threshold has been crossed. If such partner's/director's business income is les

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Raghuveer (Executive) (167 Points)
Replied 25 June 2017

*less than the threshold, he would not be required to take registration under GST. Consequently, he need

1 Like

Raghuveer (Executive) (167 Points)
Replied 25 June 2017

*not charge GST on his income from supply of services i.e. commercial rent in this case.

However the recipient business entity in such cases would, if they are registered, have to pay GST on such services under reverse charge.

1 Like

Rajeev Kumar (Owner) (54 Points)
Replied 26 June 2017

Originally posted by : Raghuveer
	*not charge GST on his income from supply of services i.e. commercial rent in this case.However the recipient business entity in such cases would, if they are registered, have to pay GST on such services under reverse charge.

Sir could you please explain in short "have to pay GST on such services under reverse charge."

Raghuveer (Executive) (167 Points)
Replied 26 June 2017

when the supplier is not registered under GST, the receiver of the service (who is registered) shall have to pay GST under reverse charge.

Rajeev Kumar (Owner) (54 Points)
Replied 26 June 2017

Originally posted by : Raghuveer
	when the supplier is not registered under GST, the receiver of the service (who is registered) shall have to pay GST under reverse charge.

Thank you Sir