GST for Tenants..!? What is the reality?

A resident of a GST-registered rental house has to pay 18% GST on monthly rent. This regulation has come into effect from last July 18. It has also been announced that this GST tax rate will be applicable only to customers registered under GST. Earlier, commercial offices and vacant spaces were rented or leased out and had to pay tax.
But if houses were rented out (either to corporates or individuals) it was tax-free. But as per the new tax rates, if the tenant is GST registered, he will have to pay 18% under the reverse charge mechanism. This can be deducted by the tenant through Input Tax Credit.As this is only for registered tenants, it may not be a problem for tenants including salaried workers and small laborers living in a rented houses. They don't even have to pay taxes. A customer registered under GST has to pay 18% rent tax on rent and services provided by it. Companies may face some impact due to this fold of the GST Council. If you rent out houses for your employees on monthly rent or lease then you have to pay tax. This will increase the expenses of the companies.Companies making such concessions for employees will have to pay 18% tax on the rent paid for the same. This may lead companies to reduce benefits for employees who stay for free.

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GST for tenants

Sowmiya Sriram

12/08/2022 04:33 PM