GST to be Discharged under RCM if Residential Dwelling is Rented to a Registered Person: AAR

Case Details: Authority for Advance Rulings, Odisha Indian Metals & Ferro Alloys Ltd., In re - [2023] 149 taxmann.com 80 (AAR-ODISHA)

Judiciary and Counsel Details

• • Gopal Krishna Pati & P.K. Mohanty, Member
  • R.K. Sahoo & A.K. Sahoo for the Applicant.

Facts of the Case

The applicant was a registered person who received service by way of taking residential premises on rent for use as its guest house for employees of company. It filed an application for advance ruling to determine whether service received by a registered person by way of renting of residential premises used as guest house of registered person would be subject to GST under Forward Charge Mechanism (FCM) or Reverse Charge Mechanism (RCM).

AAR Held

The Authority for Advance Ruling observed that the applicant was a registered person and it had taken on rent certain premises to use premises as guest house for employees. The houses taken on rent for guest house purposes were located in the residential areas. As per Notification No. 05/2022 Central Tax (Rate) dated 13-7-2022, if residential dwelling is rented to a registered person whether for residential purposes or otherwise, the tenant has to discharge GST liability irrespective of purpose of use under RCM. Therefore, it was held that the applicant would be liable to pay GST under RCM.