Lessor is liable to pay GST on forward charge basis when the residential property is rented out for commercial purpose

Last updated: 19 December 2023
Quick Summary
The Rajasthan Authority for Advance Ruling (AAR) has determined that a lessor must pay Goods and Services Tax (GST) on a forward charge basis when a residential property is rented out for commercial purposes. Even though the property's land use is designated as residential, its actual use for commercial activities means it's not considered a residential dwelling for GST purposes. The supply of service for commercial use is taxable at 18%.

Court :
AAR, Rajasthan

Brief :
The AAR, Rajasthan in the case of In Re: M/s. Deepak Jain [Advance Ruling No. RAJ/AAR/2023-24/14 dated November 29, 2023] held that the Lessor is liable to pay GST on forward charge basis when the residential property is rented out for commercial purpose. 

Citation :
Advance Ruling No. RAJ/AAR/2023-24/14 dated November 29, 2023

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Bimal Jain
Published in GST
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