Residential rent in gst

This discussion clarifies the GST implications when a private limited company rents a residential property for its employees. It explains that if the company (a registered entity) rents from another registered entity, the reverse charge mechanism (RCM) applies, meaning the company paying the rent is liable for the GST. However, when the company then lets the property to its employees for residential use, no GST is charged on the rent received from them, as this falls under an exempt supply. Consequently, any GST paid under RCM on the initial rent cannot be claimed as input tax credit (ITC) because it relates to an exempt supply.