RCM Related to Rent

Which tax payers are required to pay rent related RCM to the government. In which return and where to report it. Can RCM tax claim be taken? So when can claim be made? It is effective from the return of any month
Replies (5)
Quick Summary
This discussion clarifies the Reverse Charge Mechanism (RCM) applicable to rent payments under GST. It outlines that businesses with over ₹1 crore turnover and individuals/HUFs paying over ₹2.4 lakh annually are liable to pay RCM. The RCM tax must be reported in GSTR-3B and GSTR-1, and can be claimed as input tax credit (ITC) in the same or subsequent month's GSTR-3B return, effective from the month the rent obligation arises.

In the case of rent, the following taxpayers are required to pay RCM: -

Businesses with a turnover of more than ₹1 crore in the preceding financial year - 

Individuals/Hindu Undivided Families (HUFs) paying rent above ₹2.4 lakh per annum They need to report it in: - GSTR-3B (Monthly/Quarterly Return) - GSTR-1 (Details of outward supplies) - GSTR-2A (Details of inward supplies)

 The RCM tax paid can be claimed as input tax credit (ITC).

The claim can be made: - In the same month's return (GSTR-3B) - 

Any subsequent month's return (GSTR-3B) Effective from the return of the month in which the rent was paid. 

Above amendment where and under which notification.

For rent-related Reverse Charge Mechanism (RCM) under GST:

  1. Who Pays RCM on Rent: Registered taxpayers renting commercial property from an unregistered person.
  2. Reporting:
    • Report RCM tax in GSTR-3B, Table 3.1(d) ("Inward supplies liable to reverse charge").
  3. Claiming ITC:
    • ITC can be claimed on RCM paid, provided it's for business purposes.
    • Claim ITC in the same month’s return once RCM is paid.

This applies from the month the RCM obligation on rent arises.

we need to pay RCM on October 2024 month rent right?

wef 10/10/2024 its applicable so any amount paid / due after that date

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