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GST on rent billed but not realised

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VIVEK SHARMA

Sr. Audit Officer

25 Points Posted on 11 January 2021

One party (lessor) is in business of renting out plots on lease to various parties. The lessor party isssues invoices to the lessees and receives payment against the same. The lessor pays the GST on rent invoices issued. Sometimes the lessee party does not pay the rent bill at all and the lessor has to absorb the amount of GST already paid on unrealised rent income as the GST is payable on accrual basis.

Is there any exception to payment on GST on accrual basis so that the lessor party does not have to sustain the loss of GST paid on unrealised income?

Replies (2)

Quick Summary

This discussion addresses the challenge of paying GST on rent invoices even when the lessee hasn't paid, due to the accrual basis of GST. While there's no general exemption, a lessor might claim a refund for GST paid on unrealised rent if a legal notice is issued and the rent is shown as unrealised in IT returns. However, complications arise if the lessee has already claimed input tax credit without making payment.

Ankit Dave

Student CA Final

39 Points Posted on 11 January 2021

No exemption regarding this in gst

sivaravi

M.Com

24 Points Posted on 26 February 2021

The lessor can claim a refund for the GST paid for Unrealised Rent , if he has sent a legal notice to the lessee for the Rent, AND the Lessor I T return shows UNREALISED RENT, The situation may be difficult if input tax for the invoices has been claimed by the lessee, even without paying rent