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GST Registration compulsary for Subsidairy company

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CA Shriram Deshpande

CFO

40 Points Posted on 21 December 2023

Subsidairy company has leased the office space to parent company Whether GST Registration compulsary for subsidairy company if it charges Rent to Parent Company. The parent company will be paying GST under RCM. The subsidairy company is since 2011. The Subsidairy has not charged Rent since 2011. The Parent Company has given a loan to the Subsidairy Company(FOR THE SAME OFFICE SPACE WHICH IS LEASED) and has not charged any interest till date.Now if the Subsidairy company wants to charge Rent from FY 2023-24, will the subsidairy company be required to take GST REGISTRATION. The Rent charged would be Rs.1.15 lacs per month. The Rent charges is within the limit of GST Registration. Kindly advise. Will there be any scrutiny from the GST Department asking for penalty retrospectively. Kindly advise.

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Quick Summary

This discussion explores whether a subsidiary company, which leases office space to its parent company, needs to register for GST. The subsidiary plans to charge rent from FY 2023-24, exceeding the typical registration threshold. The query also seeks clarification on whether the parent company paying GST under RCM exempts the subsidiary, and if there's a risk of retrospective scrutiny or penalties from the GST department.