GST applicable on rentals on residential accommodation on RCM basis

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By Dr Sanjay Chaturvedi, Editor

On 17th July 2022 onwards, GST is applicable on Residential rentals paid by the tenant. Onus is on tenant to pay the GST on the rent paid irrespective of rent amount if the tenant is registered under GST.

For  example, a company paying rentals for director’s accommodation or for any rest house, in such case when the company is registered under GST then the GST is payable @18% on the rent paid irrespective of the amount of rent.

Any tenant who is registered under GST and paying rent for residential unit to accommodate him/her self or its employees/ directors then the GST is payable on RCM method.

Reverse Charge Mechanism (RCM) is method where the service consumer need to pay the GST. It is not clear as ITC is available to this or no.

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