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GST Liability on Disputed Rent income

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Taccs

23 Points Posted on 04 November 2021

Due to lack of Rent contract agreement with the Lessee the disputed Amount of rent was offered as Income in the Previous years 2yrs. However no invoice was raised for it.

Query :

are we liable to pay gst for the previous 2 yrs.
Can we avoid offering it as accrued income in the current year on the grounds that the amount is disputed and no contractual agreement is signed.

Replies (3)

Quick Summary

This discussion explores GST liability on disputed rent income, especially when no formal contract exists. The original poster offered rent as income for two previous years without issuing invoices and questions their GST liability. They also inquire if disputed rent can be excluded from current year income recognition. The response clarifies that GST is generally payable on rent received for commercial properties, even without invoices, and suggests shifting to a receipt basis for current income recognition due to the doubtful nature of the disputed amount.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 05 November 2021

As per Notification No. 12/2017, Rent paid on renting of residential dwelling unit for use as Residence is exempted from the levy of GST. It is important to note here that only residential dwelling unit for use as residence is exempted and not for use for office/commercial/ other purpose.

Taccs

23 Points Posted on 05 November 2021

The property in question is a commercial property .

CA Altamush Zafar

GST Consultant

10402 Points Posted on 05 November 2021

If you have received rent then definitely you will have to pay GST. If you have shown income of rent and issued invoices then also you will have to pay GST. For the current period you can definitely shift to receipt basis since the recognition of income is doubtful.