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Gst on Rent

Mohit (Others) (68 Points)

29 July 2020

Restaurant paying 5% GST and running business in rented premises, is restaurant liable to pay gst in rent under RCM and if yes may that claim ITC of GST on rent

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7 Replies

Sandeep shetty (Sr Accountant) (292 Points)
Replied 29 July 2020

Restaurant service attracts 5% gst subject to not taking ITC

and RCM has to be paid on rent

However ,hotels which charge above Rs 7500 per day for accommodation would be paying GST at 18% on restaurant services by availing ITC. In such cases, ITC on rent paid can be taken.

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 29 July 2020

Yes, Restaurant paying 5% GST under composition and running business in rented premises, than that restaurant liable to pay gst on rent under RCM.
As you are composition dealer you can not claim ITC of GST on rent paid under RCM.

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CA ABHAY GUPTA (Practice) (3230 Points)
Replied 29 July 2020

@ sandeep shetty ji and @ sagar patel ji, kindly provide circular or notices or any other thing who give light on thing that restaurant needs to pay GST on rent through RCM..

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 29 July 2020

Extract of Section 10, Composition scheme for reference

"Sec 10. (1) Notwithstanding anything to the contrary contained in this Act but subject to
the provisions of sub-sections (3) and (4) of section 9,"

Composition schemes benifit is available subject to provisions of sub-sections (3) and (4) of section 9,"
So, provisions of sub-sections (3) and (4) of section 9," is applicable to composition dealer also as same like normal dealer.
Composition has required to pay all RCM like normal scheme person.

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