If a small building owner lets out his shop room for an annual rent of 6 lakhs, and has no other income, he is not bound to register under gst, and this rental income is not taxable. Now ,as per the new amendment,the tenant shopkeeper, assuming he is either unregistered or a composition dealer, is required to pay 18% gst under self invoice but cannot take ITC under RCM. So who will get the tax refund? If not, can this
amendment indirectly tax something
which the original statute has clearly exempted??
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Gst on rent, October amendment
Replies (8)
Quick Summary
The amendmend leads to indirectly tax the composition tax payer tenants as they cannot take ITC. Normal registered tenant can claim ITC, while those unregistered are not liable for RCM.
Ok, thanks
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Yes, thanks...
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I agree with your analysis. Well articulated! URL
The recent amendment seems to inadvertently affect composition scheme tenants by denying them ITC, even though rental income is exempt. It raises concerns about indirect taxation on exempted income.
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The exemption to the landlord is NOT withdrawn.
The tax burden is shifted to the registered tenant under RCM.
There is no refund to anyone.
This is not “indirect taxation of exempt income” — it is a conscious policy shift under Section 9(3).
GST is now a cost to the tenant, not a tax on the landlord.
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