Now Renters Have to Pay 18% GST

What is GST?

GST (Goods and Services Tax) is a comprehensive indirect tax levied on the supply of goods and services.

It is a value-added tax (VAT) that is levied at every stage of the supply chain, from the producer to the final consumer.

GST on Rent

As per the GST Council's decision, residential rent is exempt from GST.

However, GST is applicable on commercial rent.

The rate of GST on commercial rent is 18%.

Who is Liable to Pay GST on Rent?

The tenant is liable to pay GST on commercial rent.

The landlord is responsible for collecting and depositing the GST to the government.

How to Calculate GST on Rent?

To calculate GST on rent, you need to multiply the rent amount by the GST rate (18%).

For example, if the rent is ₹10,000, the GST amount will be ₹1,800.

Input Tax Credit (ITC)

The tenant can claim ITC on the GST paid on rent.

ITC is a mechanism that allows businesses to reduce their GST liability by using the GST paid on their purchases.

Conclusion

GST on commercial rent is a new development that may have an impact on businesses.

It is important for businesses to be aware of the GST implications on rent and to comply with the GST laws.

Additional Information

• The GST exemption on residential rent does not apply to rent paid to a GST-registered landlord.
• The GST rate on rent may vary depending on the state in which the property is located.
• There are certain conditions that must be met in order to claim ITC on GST paid on rent.