RCM GST on advance rent paid in July24

I understand your concern. The new RCM (Reverse Charge Mechanism) on rent applicable from 10/10/24 has created a confusing scenario for you. Since you've already paid advance rent to an unregistered person in July-24 for the period from 1/7/24 to 31/12/24, you're wondering if you need to pay RCM on rent from 10/10/24 to 31/12/24. Here's a suggested approach: 1. _Review the contract_: Check your rent agreement or contract to see if it mentions anything about tax implications or RCM. 2. _Consult a tax expert_: Reach out to a chartered accountant or tax consultant who can provide personalized guidance based on your specific situation. 3. _Contact the GST helpline_: Reach out to the GST helpline or the GST department's official website for clarification on this specific scenario. 4. _Assess the liability_: If RCM is applicable, calculate the liability for the period from 10/10/24 to 31/12/24. Remember, it's always best to seek professional advice to ensure compliance with GST regulations.

Reposted. As there is no satisfactory reply received yet.

Please guide.

 Rent paid in July-24.Since the rent was paid in July-24, which is before the RCM applicability date, you don't need to pay RCM on that rent amount.

Probably no RCM for this period:

• RCM on renting of commercial property by an unregistered person to a registered person (Entry 5AB) applies from 10 October 2024.

• Time of supply for services under RCM (Sec 13(3)) is the earlier of the date of payment and 61 days after the supplier's invoice date. Advance rent paid in July 2024 for July–December has its time of supply in July 2024, before the entry came into force. So no RCM on that payment.

• Sec 14 (change in rate or levy): where the service period straddles the effective date, the rules for change of rate apply. For an advance paid before the change, with service partly after, it's arguable that tax applies for the post-10 October period. Many practitioners take the payment-date view.

• From the next payment after 10 October 2024, RCM applies. Composition taxpayers are exempt from 16 January 2025.