The common query I came across recently is GST applicable on shop rent. The rental of a shop (commercial property) is considered a taxable service under the GST framework and generally attracts an 18% GST. This amount the landlord collects from the tenant and remits to the government.
GST on Rent of the Commercial Property
GST becomes applicable when the annual rental income from such properties exceeds the threshold of Rs 20 lakh (Rs 10 lakh in certain special category states), thus mandating the landlord to register under GST and comply with tax obligations.
Additionally, effective October 10, 2024, a Reverse Charge Mechanism (RCM) applies when an unregistered landlord leases commercial property to a GST-registered tenant. In such cases, the tenant is responsible for paying the GST directly to the government at the applicable 18% rate.
There are limited exemptions. For example, commercial properties owned by registered charitable or religious trusts can be exempt from GST provided the rent stays below certain thresholds, such as Rs 10,000 per month for shop rent.
It is important for both landlords and tenants to understand the registration criteria, invoicing requirements, and tax responsibilities, including the use of Reverse Charge where applicable, to ensure compliance under GST law.
Get Help with GST Registration for Your Shop from Expert at NoBroker.
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Is GST Applicable on Shop Rent?
priya6
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3 months
2025-08-14T07:37:12+00:00 2025-08-14T07:37:14+00:00Comment
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