You may be pondering the question of whether you should be charging and collecting GST or the Goods and Services Tax on any rent income that is received by you through commercial properties. And if you should, how much is GST on commercial rent? Understanding this and how certain tax implications are affected is crucial if you are the landlord of a commercial property. Whether the property in question is a home or a commercial determines how GST is handled in major part. As a result, each will have a distinct GST implemented.
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The GST Act made a little adjustment to the way the tax on business rental income was applied. The limit was set at Rs. 10 lakhs in commercial rental revenue annually before GST, however, it was increased to Rs. 20 lakhs after GST. An organised method of collecting taxes from diverse sectors has been established as a result of the Goods and Services Tax (GST) implementation. Rent has been an important source of Income for many and the focus here is on the problem of rent from commercial property and the GST consequences of the same.
Is GST charged on commercial rent?
Commercial property is viewed by the Goods and Services Tax (GST) as a "delivery of service". The application of GST on rent for both residential and commercial property is briefly covered in this article.
It is very easy to apply the GST on commercial property rentals. As a result, upfront charges for a GST of 18% are applied when renting out commercial property. The following table summarises the GST scenario for commercial property rentals:
| Particulars | GST applicability on renting of commercial property |
The landlord is registered under GST |
GST @18% applicable and payable by the landlord under forward charge |
The landlord is not registered under GST |
GST not applicable |
So, if you are still unclear on the question, do I have to pay GST on commercial rent, then let me share with you the general application of GST on rentals of both residential and commercial property is summarised in the following table:
| Particulars | Status of landlord | Status of tenant | GST applicability |
GST applicability on renting of commercial property for the period from 1st July 2017 till date |
|||
Renting of commercial property |
Registered |
Registered/ Unregistered |
Taxable @18% |
Renting of commercial property |
Unregistered |
Registered/ Unregistered |
Exempt |
I believe now you understand how much is GST on commercial rent.
Read More: Is GST applicable on rental income from commercial property? How to calculate GST on an under-construction property with examples?Your Feedback Matters! How was this Answer?
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Is GST Charged on Commercial Rent?
Gauri
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2023-03-21T12:35:43+00:00 2023-03-22T19:56:10+00:00Comment
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