The Government has notified the (reverse charge mechanism) RCM on renting of property other than residential dwelling by unregistered person to registered with effect from 10 October 2024.
The RCM on commercial property is also implemented from 10th October 2024 if supplier/Landlord is unregistered.
The government in exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), on the recommendations of the Council, notified the amendments in the notification no. 13/2017-Central Tax (Rate), dated the 28th June, 2017.
Table of Contents
What does RCM on Renting Of Property Means
It means that the tenants, not landlords, will be responsible for paying GST on rentals from unregistered suppliers. The GST rate remains at 18%.
Impact on Tenants
For businesses renting commercial properties, this means an added layer of compliance, with tenants needing to manage GST payments themselves. Tenants must ensure accurate GST filings and payments, as non-compliance could result in penalties.
The clarification on Preferential Location Charges (PLC) being taxed at the same rate as construction services is essential for those dealing with premium real estate offerings.
Notification Details
Notification No. 09/2024- Central Tax (Rate)
Date: 08/10/2024
