Service tax/gst compliance for residential rental

Queries 474 views 2 replies

Prashant Singh

1 Points Posted on 05 June 2017

Hey,

We are a Gurgaon based startup where we take residential units on rent from property owners(Sublet) and rent it further to tenants(purely for long term resindential rentals)

Are we liable for Service Tax/GST? I have read that residential rental is exempted from the same.

Please advice.

Replies (2)

Shubham Gupta

Business Consultants

2077 Points Posted on 05 June 2017

sir,

residential rental is exempt,
but it depends to the contract, if contract is made direct into by owner and tenant , then no service tax, and you will get commission

if contract is made between you and owner then yes service tax will be applicable as you have commercial contract in which you are sub letting property to final tenant.

Preeti (Team_GSTSoln)

Team GST Experts

1926 Points Posted on 08 June 2017

it is noted here that service by way of renting of residential dewelling for use as residence

In first scenario when bill is made by you

in this case you are acting as an agent & using the residential complex for fulfilling your commercial purpose not for your own residence , which will attract GST compliance .and you will be charged by the owner the applicable gst rate 18% on total value of residential complex taken on rent ,

On commission /brokerage charged from the ultimate buyer you have to charge 18% . & the rest of ITC available to will vanish.

2. when billing is made directly by owner to ultimate tenant

On commission /brokerage charged from the ultimate buyer you have to charge 18%.claim itc if any