{"id":8070,"date":"2024-10-23T18:27:14","date_gmt":"2024-10-23T18:27:14","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8070"},"modified":"2024-10-23T18:58:23","modified_gmt":"2024-10-23T18:58:23","slug":"rcm-on-renting-of-commercial-properties","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/rcm-on-renting-of-commercial-properties\/","title":{"rendered":"RCM on Renting of Commercial Properties\u00a0"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-7489\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/GST-.png\" alt=\"GST Electronic Ledger System\" width=\"906\" height=\"589\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/GST-.png 686w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/GST--300x195.png 300w\" sizes=\"(max-width: 906px) 100vw, 906px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e00d1176480\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e00d1176480\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/rcm-on-renting-of-commercial-properties\/#RCM_on_Renting_of_Commercial_Properties_Important_GST_Update\" title=\"RCM on Renting of Commercial Properties\u00a0 :\u00a0Important GST Update\">RCM on Renting of Commercial Properties\u00a0 :\u00a0Important GST Update<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/rcm-on-renting-of-commercial-properties\/#Central_Board_of_Indirect_Taxes_and_Customs_Clarification\" title=\"Central Board of Indirect Taxes and Customs Clarification: \">Central Board of Indirect Taxes and Customs Clarification: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/rcm-on-renting-of-commercial-properties\/#GST_Taxability_of_Leasing_of_Residential_Property_under_GST\" title=\"GST Taxability of Leasing of Residential Property under GST\">GST Taxability of Leasing of Residential Property under GST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/rcm-on-renting-of-commercial-properties\/#GST_Taxability_of_Leasing_of_Commercial_Property_under_GST\" title=\"GST Taxability of Leasing of Commercial Property under GST\">GST Taxability of Leasing of Commercial Property under GST<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"RCM_on_Renting_of_Commercial_Properties_Important_GST_Update\"><\/span><span style=\"color: #000080;\">RCM on Renting of Commercial Properties\u00a0 :\u00a0Important GST Update<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>A corrigendum to Central Board of Indirect Taxes and Customs Notification No. 09\/2024-CTR has been released, bringing important clarity to the application of Reverse Charge Mechanism on the renting of properties. CBIC Issued Corrigendum to Provide RCM is Applicable Only on Renting of Commercial &#8220;Immovable&#8221; Property.<\/li>\n<li>Renting of non-residential (commercial\/industrial) properties. The tenant (recipient of the service) is responsible for paying GST (both CGST and SGST) under RCM. This rule comes into effect on 10th October 2024.<\/li>\n<li>The recent amendment by the CBIC mandates that tenants are required to pay GST under RCM on rent payments to unregistered landlords. CBIC notifies the renting of commercial property by an unregistered person to a registered person under Reverse Charge Mechanism to prevent revenue leakage.\u00a0This applies specifically to the renting of non-residential (commercial or industrial) properties.\u00a0CBIC clarify term &#8220;Any Property&#8221; should now be interpreted as &#8220;Immovable Property.&#8221;<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8072\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/photo_2024-10-23_23-57-40.jpg\" alt=\"Notification No. 09\/2024-CTR\" width=\"905\" height=\"1280\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/photo_2024-10-23_23-57-40.jpg 905w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/photo_2024-10-23_23-57-40-212x300.jpg 212w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/photo_2024-10-23_23-57-40-724x1024.jpg 724w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/photo_2024-10-23_23-57-40-768x1086.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/photo_2024-10-23_23-57-40-800x1131.jpg 800w\" sizes=\"(max-width: 905px) 100vw, 905px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Central_Board_of_Indirect_Taxes_and_Customs_Clarification\"><\/span><span style=\"color: #000080;\">Central Board of Indirect Taxes and Customs Clarification: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Earlier, there was confusion regarding whether RCM provisions applied to movable assets such as plant and machinery. The Central Board of Indirect Taxes and Customs has clarified that the rule applies exclusively to immovable properties, including the renting of land and buildings.\u00a0This update ensures that only immovable property rentals fall under the scope of the notification for RCM, removing any ambiguity about its application to movable assets.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"GST_Taxability_of_Leasing_of_Residential_Property_under_GST\"><\/span><span style=\"color: #000080;\">GST Taxability of Leasing of <strong>Residential Property<\/strong> under GST<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<th>Particulars<\/th>\n<th>To Unregistered Persons<\/th>\n<th>To Registered Persons<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><strong>Taxability<\/strong><\/td>\n<td>Exempt<\/td>\n<td>&#8211; Exempt up to 17.07.2022<br \/>\n&#8211; Yes, @ 18% under Reverse Charge Mechanism (RCM) w.e.f. 18.07.2022<\/td>\n<\/tr>\n<tr>\n<td><strong>Taxability w.e.f. 01.01.2023<\/strong><\/td>\n<td>&#8211;<\/td>\n<td>Yes, @ 18% under Reverse Charge Mechanism<\/td>\n<\/tr>\n<tr>\n<td><strong>Input Tax Credit (ITC)<\/strong><\/td>\n<td>Not Applicable (NA)<\/td>\n<td>ITC can be claimed by the recipient<\/td>\n<\/tr>\n<tr>\n<td><strong>Authority \/ Notification<\/strong><\/td>\n<td>Notification No. 12\/2017-CT (Rate) dated 28.06.2017<\/td>\n<td>&#8211; Notification No. 12\/2017-CT (Rate) dated 28.06.2017<br \/>\n&#8211; Notification No. 4\/2022-CT (Rate) &amp; Notification No. 5\/2022-CT (Rate) dated 13.07.2022<br \/>\n&#8211; Notification No. 15\/2022-CT (Rate) dated 30.12.2022<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong>Conditions for Registered GST Persons:<\/strong><\/span><\/p>\n<ul>\n<li>The recipient must be registered.<\/li>\n<li>The supplier must be unregistered.<\/li>\n<li>No GST applies if the residential accommodation is rented to a proprietor in an individual capacity for residential use.<\/li>\n<li>Tax @ 18% applies under the RCM if the residential property is used for a proprietary concern.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"GST_Taxability_of_Leasing_of_Commercial_Property_under_GST\"><\/span><span style=\"color: #000080;\">GST Taxability of Leasing of <strong>Commercial Property<\/strong> under GST<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 161px;\" width=\"903\">\n<thead>\n<tr>\n<th>Owner<\/th>\n<th>Tenant<\/th>\n<th>Taxability<\/th>\n<th>Remarks<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Unregistered<\/td>\n<td>Unregistered<\/td>\n<td>Not Taxable<\/td>\n<td>&#8211;<\/td>\n<\/tr>\n<tr>\n<td>Registered<\/td>\n<td>Unregistered<\/td>\n<td>Taxable<\/td>\n<td>Tax to be paid under Forward Charge Mechanism<\/td>\n<\/tr>\n<tr>\n<td>Registered<\/td>\n<td>Registered<\/td>\n<td>Taxable<\/td>\n<td>Tax to be paid under Forward Charge Mechanism<\/td>\n<\/tr>\n<tr>\n<td>Unregistered<\/td>\n<td>Registered<\/td>\n<td>Taxable<\/td>\n<td>Tax to be paid under Reverse Charge Mechanism<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Previously, there was ambiguity about whether the provision would apply to movable assets like plant and machinery. However, the Central Board of Indirect Taxes and Customs has clarified that this rule pertains exclusively to immovable properties, such as land and building rentals.<\/p>\n<p>Tenants paying rent to unregistered landlords need to ensure they are registered for GST to comply with the RCM provisions. The tenant is responsible for calculating and paying the applicable GST (CGST + SGST) on rent every month.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>RCM on Renting of Commercial Properties\u00a0 :\u00a0Important GST Update A corrigendum to Central Board of Indirect Taxes and Customs Notification No. 09\/2024-CTR has been released, bringing important clarity to the application of Reverse Charge Mechanism on the renting of properties. CBIC Issued Corrigendum to Provide RCM is Applicable Only on Renting of Commercial &#8220;Immovable&#8221; Property. &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[933],"tags":[1121],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8070"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8070"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8070\/revisions"}],"predecessor-version":[{"id":8074,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8070\/revisions\/8074"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}