No, All Tenants Are Not Needed To Pay 18% GST On Monthly Rentals! Check Who Needs To Pay 18% GST On Rentals?

According to a new notification was issued this week, renting out a residential house to a GST registered person for living is now under the purview of GST and a rate of 18% shall be introduced for letting out a residential house or room or apartment.

Tenant To Pay 18% GST Along with Rent

However the burden of tax will be on the tenant and not the landlord. So basically under the reverse charge mechanism, the tenant has to pay 18% GST on his own behalf on the rent. 

Senior Tax Adviser RS Goyal said that it is clear in the provision that when a residential house is being taken for residential use, then GST will be levied on it.

Till now, the landlords are exempted from GST and the residential house can be used for any business activity if the person gives his residential apartment or residential house or residential room on rent to any person. 

But moving forward if one is registered in GST and also rents a house or flat for himself or to live with family and make the rent agreement in the name of your business So on that you have to pay GST along with rent.

What is GST?

GST stands for the Goods and Services Tax, is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. and is a single domestic indirect tax law for the entire country.

The GST act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017. The tax which is levied on the supply of goods and services, is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.