RCM Alert: Tenants Now Responsible for GST on Non-Residential Rentals!
In an effort to bring unregistered non-residential renting transactions into the tax net and ensure proper GST collection, the government has introduced Reverse Charge Mechanism (RCM) on the renting of non-residential properties. This change, effective from 10th October 2024, makes it the responsibility of the registered tenant to pay 18% GST when renting from an unregistered owner.
Example: If an unregistered individual rents out office space to a GST-registered company, the company is required to pay the 18% GST directly to the government instead of the landlord.
This move ensures that even if the property owner isn’t registered under GST, the government can still collect tax through the tenant, covering all transactions involving commercial properties.
The copy of the notification is as under:
CA Arpit Kahandelwal