SELF INVOICE FIRMAT OF RENT

GST Applicability on Rent Paid to Unregistered Building Owner - *

GST applicability*: GST is applicable on rent paid to an unregistered building owner under the Reverse Charge Mechanism (RCM). -

*GST rate*: The GST rate for renting of immovable property is 18% (9% CGST + 9% SGST). GST Calculation -

*Rent amount*: ₹15,000 - *GST amount*: ₹2,700 (18% of ₹15,000) GST Payment -

 *Recipient liable*: The registered tax payer (recipient) is liable to pay GST under RCM. - *GST payment*: The recipient needs to pay ₹2,700 (₹1,350 CGST + ₹1,350 SGST) to the government.

Sample Invoice Format - *Invoice details*: - *Invoice number*: RN001 - *Date*: [Current date] - *Bill to*: [Unregistered building owner's name and address] -

*Descripttion*: Rent for [month/year] - *Amount*: ₹15,000 - *GST details*: - *GSTIN*: Not applicable (since the owner is unregistered) - *GST amount*: ₹2,700 (₹1,350 CGST + ₹1,350 SGST)

Accounting Entry - *Debit*: Rent expense (₹15,000) - *Debit*: GST payable (₹2,700) - *Credit*: Cash/Bank (₹17,700) By following these guidelines, the registered tax payer can correctly account for GST on rent paid to an unregistered building owner.

For a ₹15,000 monthly rent of an ordinary residential dwelling used as a residence, GST is generally not payable when the tenant is a registered person. The reverse-charge rule for renting a residential dwelling to a registered person has an exception where the registered tenant is a proprietor who rents it in a personal capacity for their own residence, not for business. If the property is commercial or otherwise not covered by that exception, GST at 18% generally applies under reverse charge: the registered tenant pays it to the Government, and the unregistered landlord does not collect GST or issue a GST tax invoice. Confirm the property’s use and the tenant’s capacity before applying the rule.

• Where reverse charge applies, GST on ₹15,000 rent is ₹2,700 per month (assuming the full amount is taxable and no other charges affect the value). The tenant reports and pays it through the applicable GST return/payment process; ITC may be available subject to normal eligibility and business-use conditions.
• The landlord can issue a rent receipt or commercial invoice, not a GST tax invoice. Suggested format:

Rent Receipt/Invoice | No.: ___ | Date: ___
Landlord: Name, address, PAN: ___ (GSTIN: Not registered)
Tenant: Name, address, GSTIN: ___
Property address: ___ | Rental period: ___
Rent: ₹15,000 | GST: Not charged by landlord; payable by tenant under reverse charge, if applicable
Total rent payable to landlord: ₹15,000
Landlord’s signature: ___
The tenant should retain this document and record the reverse-charge tax separately in its GST records.

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Rent paid to an unregistered owner (Rs 15,000 a month):

• Commercial property rented from an unregistered person by a registered person: RCM at 18% (Notf 13/2017 Sl. 5AB, from 10 October 2024), except for composition taxpayers (exempt from January 2025). Residential dwelling rented by a registered person: RCM under Sl. 5AA.

• Issue a self-invoice (Sec 31(3)(f)) each month (or consolidated), pay RCM in cash (3.1(d)), and claim ITC in 4A(3) if used for taxable business. Issue a payment voucher (Sec 31(3)(g)).