GST ON RENTING OF IMMOVABLE PROPERTY SERVICE

GST ON RENTING OF IMMOVABLE PROPERTY SERVICE

For every space renting out or lease it out for commercial purposes, the liability of GST (Goods and Services Tax ) arises. So, maximum in the cities or towns where commercial business are happened, part of the building or whole of the buildings are rented out or lease out to business organizations, the owner is liable to take registration of GST from the nearest Office. They have to collect the GST from the tenants or Lessee for the payment of GST to the Government Account. Other the related details of this service are given below and and for every update, clarifications from the BOARD will be updated in this page.

Definition and Scope of the Renting of Immovable Property Service :- Any person engaged in providing any service connected with the renting of an Immovable Property with following the given conditions :

a.   When a property is given out on lease or rent or easement or licensed to occupy.

b.   When any property is leased out including a commercial or industrial or residential property for business either partly or wholely.

Note : As per Notification No. 12/2017 Dated 28.6.2017, levy of GST is exempted on renting income of residential property if it is rented for residential purpose otherwise GST is leviable against the renting income on residential property rented out to commercial business organization or any other form other than residential purpose.

SAC Code (Service Accounting Code) of Renting of Immovable Property Service Under GST :

1.   Renting of Immovable Property Service  : 997212

Liability of GST on Renting of Immovable Property Service : As per section 22 to 25, any person who is engaged in supply of goods or rendering of services or both will be liable to be registered under GST if,

1.   Aggregate turnover in a financial year of taxable supply of Goods or Services exceeds Rs. 20 Lakhs or,

2.   Aggregate turnover in a financial year of taxable supply of goods or services exceeds Rs. 10 lakhs if the person is located at North Eastern States of India (including Assam, Meghalaya, Manipur, Mizoram,Nagaland, Arunachal Pradesh, Tripura and Sikkim) and states of Himachal Pradesh, Uttarankhand and Jammu & Kashmir.

Rate of GST rate : As per the rate of GST Notification, rate of GST in respect of Advertising Agency Service is 18% without ITC (Input Tax Credit).

EXEMPTIONS ON RENTING OF IMMOVABLE PROPERTY SERVICE UNDER GST :

 Levy of GST on renting income is exempted on the following conditions :

1.   Residential Property rented out for residential purpose only.

2.   Renting income which is managed by a registered charitable trust or a religious trust and given out for use to public in the condition of (a) rent of rooms are charged Rs. 1000 or Less per day, (b) rent on shop and other spaces for business are charged Rs. 10000 or less per month and (c ) rent on community hall or an open area is charged Rs. 10000 or less per day.

Eligibility of ITC (Input Tax Credit) : No ITC, but in similar fashion to the earlier regime of Service Tax where few of the input services like security services or repair and maintenance services, when these services are used for the whole of the complex and the service provider is eligible to take credit for these input services, in GST also clarification are need to be updated from the department in this case. Regarding Input credits, Capital Goods Credit and Input Services credit, during the period of Service Tax prior to GST also, circular like 98/1/2008 – ST Dated 4.1.2008 strictly doesn’t allowed to use for the payment of Service Tax under Renting of Immovable Property.

For SAC Code numbers of other Services CLICK HERE.

To view the GST site, click here https://cbec-gst.gov.in/gst-goods-services-rates.html

For any further query, you can drop a mail to our official mail ID # dnbreply@gmail.com , our associates will reply on time. 

And for other Services and Goods under GST keep updating with GST Guidance.