The rent paid for commercial property (such as offices, shops, warehouses) is treated as a supply of service under the GST regime. So, how much is GST on commercial rent? It attracts 18 % GST on the rent charged. Unlike residential rent (when used for purely residential purposes), which is exempt from GST, commercial leases are fully taxable under GST. However, whether the landlord must register for GST depends on the total turnover (including all taxable and exempt supplies) in a financial year.
If that turnover exceeds Rs. 20 lakh (Rs. 10 lakh in certain special category states), the landlord must register and collect GST on commercial rent. Once registered, the landlord issues invoices with GST (9 % CGST + 9 % SGST) and remits the tax to the government.
One important mechanism is the reverse charge: in some cases, the tenant (if GST-registered) is liable to pay GST under reverse charge if the landlord is not registered. Thus the tenant bears the tax burden and may also claim Input Tax Credit (ITC), subject to conditions.
To illustrate: suppose you lease a commercial shop for Rs. 50,000 per month. At 18 % GST, the additional tax would be Rs. 9,000 (50,000 × 0.18). The landlord collects Rs. 59,000 from the tenant (rent + GST) and then pays Rs. 9,000 to the government.
I hope this helps!
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How Much is GST on Commercial Rent?
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2025-09-26T08:41:47+00:00 2025-09-26T08:41:50+00:00Comment
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