Taxmann’s Guidance Note on GST Applicability on Renting of Residential Dwelling

FAQ’s on GST on renting of residential dwelling

Notification No. 05/2022-Central Tax (Rate), Dated 13 07, 2022

Summary

The renting of residential dwellings for residential purposes is generally exempted from GST. However, with effect from July 18, 2022, if this service is provided to a registered person then the exemption would not be available (i.e. GST would be applicable). Further, the registered person receiving the above services would be liable to pay GST under reverse charge.

About GST on renting of residential dwelling

The service of renting a residential dwelling for residential purposes in all cases was exempted under GST up to July 17, 2022. However, the GST council in its 47th GST Council recommended the withdrawal of the given exemption when these services are provided to a registered person. In other words, GST would be applicable when a residential dwelling is rented to a registered person. Further, the notification of reverse charge on services has also been amended to provide that the service by way of renting a residential dwelling to a registered person would be subject to GST under reverse charge. Thus, the registered person receiving the above service would be liable to pay GST under reverse charge. To sum up the above changes, with effect from 18 July 2022 the GST on renting a residential dwelling to a registered person would be subject to GST under reverse charge.

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