Under Goods and Services Tax (GST), renting of residential and commercial property is considered as ‘supply of service’.
Rental income in the case of residential property has undergone a drastic change with effect from 18th July 2022. Hence, in order to go through the entire scenario of GST applicability on renting of residential property, it has been bifurcated the same in the following three periods -
Comparative analysis of GST exemption on renting of residential dwelling for all the periods i.e., from 1st July to 2017th July 2022, from 18th July 2022 to 31st Dec 2022 and from 1st January 2023 to till date.
Comparative analysis of GST applicability on renting of residential dwelling for both the periods i.e., from 1st July to 17th July 2022, from 18th July 2022 to 31st Dec 2022 and from 1st January 2023 to till date.
GST applicability on renting of commercial property is quite simple, GST mandates the owner the property to get registered if income from such property breaches the basic threshold limit of 20 Lakhs. Accordingly, GST is applicable @ 18% under forward charge on renting of commercial property
The tenant can claim the GST paid on rent to offset other tax liabilities. Put simply, if the conditions outlined in Section 16 of the CGST Act 2017 are met, the Input Tax Credit (ITC) for GST paid on rent can be utilized
ITC on repairs and renovation of property given on rent.
“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation.”
Prepared On: 17/10/23
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