Odisha
Advance ruling on GST RCM applicability on residential dwellings
M/s. Indian Metals and
Ferro Alloys Limited having principal place of business at Odisha and
registered under GST has filed an application for advance ruling under Section
97 of CGST Act, 2017 and Section 97 of the OGST Act, 2017 in FORM GST ARA-01. The
Applicant has its manufacturing unit at Therubali and at Choudwar, it has
captive mines at Sukinda. As stated, the Applicant has taken on rent certain
premises at New Delhi and Jaipur in Odisha, as guest house.
The applicant has taken a house on rent in
New Delhi to be used as its guest house. The service provider in New Delhi used
to claim GST on its invoice under the forward charge mechanism, which was paid
by the applicant.
The Applicant has stated that the term
"Residential Dwelling" is not defined anywhere in GST Act or in the
earlier Service Tax regime. The applicant drawn attention on Notification No.
05/2022 dated 13-07-2022 which brought an amendment made in Notification No.
13/2022 by inserting S.No. 5AA. As per the said amendment, while any
residential dwelling used as residence by a non-registered person is exempted
from levy of GST, the said service received by a registered person is
chargeable under GST. The applicant also submitted rent agreement copies
furnished, the nature of rented properties under discussion clearly appears to
be residential properties used for commercial purpose.
Findings of
the case
The applicant in this case has sought an
advance ruling on the applicability of GST on the service by way of renting a
residential dwelling to a registered person that, Whether Service Received by a
registered person by way of renting of residential premises used as guest house
of the registered person is subject to GST under Forward Charge Mechanism (FCM)
or Reverse Charge Mechanism?
From the above reference, it has been
observed that the Applicant has received the service by way of taking
residential premises on rent for use as its guest house and the said service is
subject to GST under Reverse Charge Mechanism in view of the Notification No.
05/2022-Central Tax (Rate) dated 13th July, 2022.
Let us give a brief explanation of RCM applicability
on residential property. The following table will provide a better and comparative
analysis of GST applicability/ exemption on renting of residential dwelling for
both the periods i.e., from 1st July till 17th July 2022 and from 18th July
2022 onwards –
|
Particulars |
1st July 2017 till 17th July 2022 |
18th July 2022 onwards |
|
Conditions
to be satisfied for availing GST exemption on renting of residential dwelling |
·
The registered person is engaged in providing service relating to
renting of residential dwelling; and ·
The rented residential dwelling is used by the tenant for the purpose
of residence.
|
·
The registered person is engaged in providing service relating to
renting of residential dwelling; and ·
The rented residential dwelling is used by the tenant for the purpose
of residence; and ·
The tenant is not registered under GST.
|
|
GST
applicability when the residential dwelling is used for residential purpose
and the tenant is registered under GST
|
Nil |
GST
applicable @18% and GST is payable by tenant under reverse charge.
|
|
GST
applicability when the residential dwelling is used for residential purpose
and the tenant is not registered under GST
|
Nil |
Nil |
|
GST
applicability when the residential dwelling is used for residential purpose
and the landlord is registered under GST
|
Nil |
GST is
applicable only if the tenant is registered under GST
|
|
GST
applicability when the residential dwelling is not used for residential
purpose
|
GST
applicable @ 18%
|
GST
applicable @ 18% |
No comments:
Post a Comment
Thank you so much reader!!!!!!!!!!! for giving us your precious time. If you like this article then do not forgot to follow and share.