GST ON RENTAL OF RESIDENTIAL DWELING UNIT ON RCM

GST (Goods and Services Tax) is applicable on residential property rentals, but with certain conditions.

Since both landlord and tenant are registered dealers, GST will apply.

However, the tax liability depends on the specific circumstances:

 1. If the property is rented for personal use (e.g., employees' residence), GST is not applicable.

2. If the property is rented for commercial use (e.g., office space), GST is applicable. 

Assuming the property is used for residential purposes, GST might not be applicable. 

However, if the tenant uses the property for commercial purposes, GST would apply.

Regarding FCM (Forward Charge Mechanism) and RCM (Reverse Charge Mechanism): 

1. FCM: Landlord is the supplier, and tenant is the recipient. Landlord charges GST, and tenant pays.

 2. RCM: Tenant is the recipient, and landlord is the supplier. Tenant pays GST, and landlord recovers.

In this case, since both parties are registered dealers, FCM would likely apply.

RCM is applicable in this case since tenant is registered. For residential property, registration of landlord is irrelevant.

GST on residential dwellings has a specific exemption that trips up a lot of people.

Short answer: if you are renting a residential dwelling for use as a residence (not office), no GST applies at all ,  neither forward charge nor RCM. The exemption under Entry 12 of the Exemption Notification covers residential dwellings rented for residential purpose.

The RCM confusion comes from Notification No. 09/2024-CT(Rate) dated October 8, 2024, which introduced RCM for renting any property other than residential dwelling by an unregistered landlord to a registered tenant. The key phrase is other than residential dwelling. This applies to commercial property only.

Scenarios:
- Residential dwelling rented for residential purpose: Exempt from GST (no RCM, no forward charge)
- Commercial property rented by unregistered landlord to registered tenant: RCM applies at 18% from October 10, 2024
- Residential dwelling rented for office/commercial use: Was taxable at 18% under forward charge (if landlord registered). Court positions on this are still evolving.

This [GST on rent guide covering RCM, ITC rules, and the October 2024 notification](https://taxgarden.in/blog/gst-on-rent-commercial-residential-rcm-itc-guide) has the full scenario table with applicability, ITC eligibility, and rate.