GST on renting out immovable properties/hotel for commercial use

Renting out immovable property or hotel for commercial use is a common practice in India. It is a lucrative business opportunity for many people. However, the introduction of the Goods and Services Tax (GST) regime in India has brought in a lot of confusion and questions about the applicability of GST on renting or letting out immovable property or hotel for commercial use.The GST on renting or letting out immovable property or hotel for commercial use has come into effect from 1st July 2017. Let us explore the various aspects of GST on renting or letting out immovable property or hotel for commercial use.

What is GST on renting or letting out immovable property or hotel for commercial use?

GST on renting or letting out immovable property or hotel for commercial use is a tax that is levied on the rental income earned by the owner of the property. The GST rate for renting or letting out immovable property or hotel for commercial use is 18% (9% CGST and 9% SGST). However, if the property is rented for residential purposes, then GST on renting or letting out immovable property or hotel for commercial use is not applicable.

Who needs to pay GST on renting or letting out immovable property or hotel for commercial use?

The owner of the property who rents or lets out immovable property or hotel for commercial use needs to pay GST on the rental income earned. The owner can claim input tax credit on the GST paid on the maintenance charges, repairs, and other expenses incurred on the property.

What is the threshold limit for GST on renting or letting out immovable property or hotel for commercial use?

The threshold limit for GST on renting or letting out immovable property or hotel for commercial use is Rs. 20 lakhs. If the annual rental income earned by the owner of the property is less than Rs. 20 lakhs, then GST is not applicable.

How to register for GST on renting or letting out immovable property or hotel for commercial use?

The owner of the property needs to register for GST on renting or letting out immovable property or hotel for commercial use if the annual rental income earned is more than Rs. 20 lakhs. The owner can register for GST online through the GST portal.

What are the documents required for GST registration on renting or letting out immovable property or hotel for commercial use?

The following documents are required for GST registration on renting or letting out immovable property or hotel for commercial use:

1. PAN card of the owner

2. Address proof of the owner

3. Bank account details of the owner

4. Rental agreement

5. Copy of property ownership documentsConclusionIn

Conclusion

GST on renting or letting out immovable property or hotel for commercial use is a tax that is levied on the rental income earned by the owner of the property. The GST rate for renting or letting out immovable property or hotel for commercial use is 18%. The owner of the property who rents or lets out immovable property or hotel for commercial use needs to pay GST on the rental income earned. The owner can claim input tax credit on the GST paid on the maintenance charges, repairs, and other expenses incurred on the property. The threshold limit for GST on renting or letting out immovable property or hotel for commercial use is Rs. 20 lakhs. If the annual rental income earned by the owner of the property is less than Rs. 20 lakhs, then GST is not applicable.