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Rcm on rent

sneha sitlani (43 Points)

15 September 2020

I pay rent of rs 3000 p.m. I have gst number and the recipient is unregistered. do i have to pay rcm on rent?

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9 Replies

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 15 September 2020

Not required to Pay RCM on rent..
As section 9(4) of CGST Act, 2017 RCM on URD Purchase is scrapped for all except Promoter/ developers for Specified items..

Shivam RC (Student) (23683 Points)
Replied 15 September 2020

You are not required to pay RCM on Rent paid to Unregistered Landlord. Rent is not covered under Section 9(3) of the CGST Act 2017. And Section 9(4) of the CGST Act 2017 has been amended vide CGST Amendment Act 2018 and now RCM will be only on Purchase of Notified Goods / Services procured by Notified Dealers from URD.

As of now, only Real Estate Developers and associated goods ( like Cement ) have been notified w.e f 01/04/2019 for RCM u/s 9(4) of the CGST Act 2017.

Regards,
Shivam RC.

1 Like

sneha sitlani (43 Points)
Replied 15 September 2020

And I also pay 4000 rent to a registered dealer. what will be the gst treatment for that

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 15 September 2020

Rent of residential property is Exempt from GST.
and if you are paying rent for a property other than residential property than that Registered Party will charge GST @ 18% on rent Invoice.

You can take ITC of same....

Shivam RC (Student) (23683 Points)
Replied 15 September 2020

There will be no GST treatment for you for the Rent paid to the GST Registered Landlord. The landlord will issue you a Tax Invoice and collect GST @ 18% on Rent Amount. If it is a commercial property and is being used in the course or furtherance of business, then you can claim ITC.

Note : As per Notification No. 12/2017 - Central Tax ( Rate ), dated 28th June 2017, Residential House Property let out for Residential purpose is "EXEMPTED" from GST.

Regards.

3 Like

sneha sitlani (43 Points)
Replied 15 September 2020

Sir the first question was about the rental of a commercial property where are i pay rent of 3000 p.m to an unregistered dealer. So I am not liable to pay rcm right?

Shivam RC (Student) (23683 Points)
Replied 15 September 2020

Yes Ma'am you are right...
You are not liable for RCM in the first case

sneha sitlani (43 Points)
Replied 18 September 2020

What are the specified items on which rcm is applicable after the amended cgst act 2018? Does it also provide relief from paying rcm on frieght?

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 18 September 2020

If you take Property on rent from Unregistered Party, whether property is residential or commercial...NO RCM
If you take property on rent from Registered Party, than if Property is residential than Exempt_No tax and if It's commercial than Regi.Peraon will Charge GST from you along with Rent.

RCM on freight Paid to GTA (Goods Transport Agency) is applicable as per Section. 9(3) i.e compulsory RCM_ So, there is no relaxation in that section and accordingly you are liable to pay GST under RCM, if you take service of GTA.

Section 9(4) is RCM on Purchase from unregistered dealer, which is applicable to all, Now, after amendments it's applicable to ""Promoter/ developers only"" for the ‘specified supplies'

Specified Goods here means..
1.if Promoter / developers purchase Cement and Capital Goods from unregistered dealer than developer is liable to pay tax under RCM.
2. If Purchase of Developers from Unregistered Party is more than 20% of total Purchase, than on excess of 20% URD Expenses developer will liable to Pay GST under RCM.(only 20,% URD Expenses allowed)