Reverse charge on rent

RCM 1886 views 4 replies

Prameet Chawla

27 Points Posted on 27 July 2017

A shopkeeper registered under GST pays rent for the shop to the landlord of the shop who is unregistered under gst and the rent is 20,000/- per month. now since the landlord doesn't give a rent receipt with GST will the shopkeeper be required to pay GST in the form of reverse charge to the govt. Also if the shop keeper is registered under composition rule will he get the input credit for reverse charge if applicable. will it be better for the shopkeeper to migrate to normal GST instead of composition if no input credit on reverse charge can be availed?

Replies (4)

RAMESH D MODI

Proprietor

4869 Points Posted on 27 July 2017

yes rcm applicable

RAMESH D MODI

Proprietor

4869 Points Posted on 27 July 2017

no itc if composition opted

RAJA P M

"Do the Right Thing...!!!"

128152 Points Posted on 27 July 2017

If the Tenant is Unregistered then no more effect on rent paid.

But,

The tenent is registered as Regular Dealer or Composition Dealer then he ll be pay Tax under RCM base if the landlord is unregistered.

The landlord is registered then the Registered Regular Dealer (tenant) is received taxable receipt he can get ITC.

If the tenant is Composition Dealer He can't available ITC. But, Don,t pay tax under RCM base If the landlord is registered...

Ahmed Ali

388 Points Posted on 27 July 2017

Mr. Prameet Chawla

If the landlord is unregistered and his tenant(shopkeeper) is registered, then definitely shopkeeper has to pay GST under Reverse Charge @ 18%.

If the shopkeeper is a composition dealer, then he is not eligible for any ITC even if paid under reverse charge.

So, keeping in view of the eligibility of ITC, I suggest you to opt out of composition scheme and obtain normal registration.