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Published on:
February 20, 2023
By
Paramita

GST on Service of Renting of Residential Dwelling w.e.f. 18-07-2022

The Goods and Services Tax (GST) is a tax system in India that was implemented on July 1, 2017. The GST replaced all indirect taxes on goods and services that were levied by the central and state governments. The GST regime is constantly evolving, with changes being made to the tax structure and compliance guidelines from time to time.

One of the recent changes made in the GST regime is the levy of GST on the service of renting of residential dwelling w.e.f. 18-07-2022. This means that if you own a residential property that you rent out to tenants, you will now be liable to pay GST on the rent collected.

What is the rate of GST on renting of residential dwelling?

The GST rate on renting of residential dwelling is 18%. This means that if you collect a rent of Rs. 10,000 per month, you will have to pay GST of Rs. 1,800 per month.

Who is liable to pay GST on renting of residential dwelling?

The GST on renting of residential dwelling is applicable to those who own residential properties and rent them out to tenants. The owner of the property is liable to pay GST on the rent collected.

Are there any exemptions to the levy of GST on renting of residential dwelling?

Yes, there are exemptions to the levy of GST on renting of residential dwelling. The exemptions are as follows:

1. Residential properties rented for residential purposes (e.g. houses, apartments, etc.)

2. Residential properties rented for charitable purposes

3. Residential properties rented for educational purposes

4. Residential properties rented for religious purposes

5. Residential properties rented to government departments and agencies

What are the compliance guidelines for the levy of GST on renting of residential dwelling?

As with any other GST compliance, the compliance guidelines for the levy of GST on renting of residential dwelling are also quite comprehensive. Some of the compliance guidelines that owners of residential properties must follow are:

1. Register for GST if the rent collected is above Rs. 20 lakhs per annum

2. Collect GST from tenants and deposit it with the government

3. File GST returns regularly

4. Maintain proper records of all rent collected and GST paid

Conclusion

The levy of GST on renting of residential dwelling is a new development in the GST regime. It is important for owners of residential properties to understand the implications of this levy and comply with the guidelines set by the government. Failure to comply with the guidelines can result in penalties and legal action. If you are a landlord who rents out residential properties, it is advisable to consult a tax expert for guidance on GST compliance.

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Updated on:
March 16, 2024