From 01.07.2017 the change to GST regime has also mandated the levy of GST in case of renting of immovable property. Still there are two general questions arise in the mind of every immovable property owner who intends to lease out the same.
What is the law regarding taxability of Renting of Immovable property under GST Regime?
The renting of immovable property is taxable under GST Regime. However if the annual lease rent is less than Rs.20 Lacs then Owner is not required to obtain GST registration and to pay any tax on rent received. It is important to note that in such case section 31(3) (f) of the CGST Act, 2017 provides that the registered person i.e. recipient (lessee in this case) shall be liable to pay GST under Section 9(4) of the CGST Act, 2017 (i.e. Registered person shall be liable to pay tax under Reverse charge mechanism.)
Further for calculation of annual turnover of immovable property owner, any other income from any other commercial property or some other supply of goods or services will be definitely clubbed so as to arrive at annual turnover.
What is place of Supply of service in case of Renting of Immovable property under GST Regime? (I.e. in which state registration of GST is required?)
Section-12 of the IGST Act, 2017 deals with the place of supply of service. The subsection (3) of said section states that where location of supplier & recipient is in India and the supply of services directly in relation to any immovable property including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any services provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work, shall be the location at which the immovable property is located or intended to be located.
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