18% GST on house rent..!? Who will be affected..?

According to the new GST rules, the GST registrants will have to pay 18 percent Goods and services Tax (GST) on rent of any property like a house, office, etc. This new tax will be implemented from July 18. GST tax levies and ongoing changes are causing a lot of impact on the people. undeniable truth. In this situation, GST has been brought in the rent payment for the house and office. Who will lose due to this new rule change? Who benefits..? Do you know the explanation given by the central government..?
18 percent tax on rent is applicable only to lessees or lessees registered under GST. This means that 18 percent GST is levied on rent paid to the owner of a house or office if the person carrying on the business or profession is registered under GST. Earlier, GST was levied only on rent or lease of commercial property such as offices or retail premises. This left corporates or individuals exempt from GST on rent or lease of residential properties. But as per the new rules, a GST-registered lessee will have to pay 18 percent GST on rent and lease amount under the Reverse Charge Mechanism (RCM). The tenant or lessee can claim this tax amount as GST tax credit through their input tax credit.This 18 percent tax is applicable only when the tenant or lessee is registered under GST and files GST returns. Thus the owner of the property will not have to pay GST tax. The new changes implemented after the 47th meeting of the GST Council will affect companies and professionals who have rented or leased houses. This does not affect the common house owners and monthly wage earners.The new tax changes will now attract 18 percent GST on rent paid by companies for residential premises rented out for use as guest houses or staff quarters. It will only increase the costs of the companies. Similarly, the central government has clarified that the GST tax is not applicable if the houses are rented or leased for personal use. Similarly, a house rented or leased by a company owner for its own use is not subject to GST.

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GST on home rents

Sowmiya Sriram

15/09/2022 05:12 PM