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Input tax credit on rent to rent
A proprietorship firm run a business of exempted goods registered under GST and for the business shop(Rental property- not owned property) he pay monthly rent to the landlord and for the same he had paid RCM under GST. Further, he owned commercial property and the same was let-out and received rent by giving GST invoice to the tenant. Now my question is can he avail the GST paid under RCM in business shop dealing exempted goods as input tax credit towards discharging tax liability on commercial property let-out to the tenant.?
Replies (2)
Quick Summary
As per Section 17(2) of the CGST Act, ITC is not available for supplies of exempt goods or services. Since the proprietorship firm deals in exempted goods, the GST paid under RCM on rental for the business shop cannot be availed as ITC towards discharging tax liability on the commercial property let-out.
ITC on rent-to-rent transactions depends on whether the supplier's invoice is GST compliant. Common issues that block ITC claims:
- Wrong GSTIN on supplier invoice
- Incorrect Place of Supply
- Tax type mismatch (CGST/SGST vs IGST)
All these can be caught before claiming ITC. I built invoicecheck.in to validate exactly these errors in 15 seconds — helps avoid ITC rejections later.
What specific issue are you facing with the ITC claim? Happy to help further.
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