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RCM on Renting of working women hostel

476 views 2 replies
The owner of the commercial building is not registered under GST.
He renovates the structure, adding 27 rooms with attached bathrooms.

Another person, a GST-registered individual, who owns a hotel business took the above building on rent to operate a working women's hostel.

Query:-
1. Does the GST-registered individual have to pay RCM on rent payments?
2. Is the Working Women's Hostel business GST exempt? 
3. Is it necessary for a GST-registered person to obtain new GST registration for a new hostel business? or continue to include the Turnover from the working women's hostel in the current GST Monthly Return.
4. if the Working women hostel business is exempt and RCM applies then how can utilize the input credit acquired through RCM
Replies (2)

1. Yes.

2. Yes exempted.

3. If the working women's hostel business is a separate and distinct business activity, then it is necessary for the GST-registered person to obtain a new GST registration for the new hostel business. If it is considered as an expansion of the current business, then it can be included in the current GST monthly return.

4. If the working women's hostel business is exempt from GST and RCM applies on rent payments, then input credit can be acquired through RCM but it can't be utilized for making GST exempt supplies, it can only be used to set off GST liability on taxable supplies.
 

Thank you


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