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RENT RCM APPLICABLE FOR SALE OF EXEMPTED GOODS?

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karthi keyan

23 Points Posted on 24 October 2024

LANDLORD IS UNREGISTERED AND TENANT IS REGISTERED IN GST AND SELLING EXEMPTED GOODS.
KINDLY SUGGEST RCM APPLICABLE OR NOT AND SHARE ALONG WITH THE SECTION

Replies (4)

Quick Summary

This discussion clarifies whether the Reverse Charge Mechanism (RCM) applies to GST when an unregistered landlord rents to a registered tenant selling exempted goods. The consensus is that RCM is not applicable in this scenario because the goods being sold are exempt from GST. Exempt supplies are not taxable under the CGST Act, and RCM provisions, as outlined in Section 9(3) and Section 17(2)(a), do not apply to such supplies.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 24 October 2024

the tenant is registered under GST and selling exempted goods. The landlord is unregistered. RCM (Reverse Charge Mechanism) is not applicable in this case, as the tenant is selling exempted goods.

Exempted goods are not subject to GST, and therefore, RCM does not apply. Section 2(47) of the CGST Act defines "exempt supply" as a supply of goods or services that is not taxable under this Act.

Section 9(3) of the CGST Act states that the government may, by notification, specify categories of supply where the recipient shall pay tax instead of the supplier (RCM).

However, this section is not applicable in this case, as the goods are exempted.

Section 17(2)(a) of the CGST Act states that RCM is not applicable to exempt supplies.

In summary, RCM is not applicable in this scenario, as the tenant is selling exempted goods.

See for specific guidance on this matter, as GST laws and regulations are subject to change.