GST on rent: These tenants need to pay 18% tax on renting house

A GST-registered tenant needs to pay a goods and services tax of 18 per cent for renting a residential property, according to the new GST rules effective from July 18. 

Earlier, only commercial properties like offices or retail spaces given on rent attracted GST.

However, the tenant can claim the GST paid under input tax credit as a deduction.

According to the recommendations of the 47th GST Council meeting, tenants should pay an 18 per cent GST on a reverse charge basis (RCM) and they can later claim it as a deduction under the input tax credit.

The 47th GST Council meeting at June-end decided to accept the group of ministers' interim reports on the correction of duty inversion and exemption.

Pre-packaged and pre-labelled retail packs, including curd, lassi and butter milk, were brought under GST, effective July 18.

The Council also decided to impose a GST of 18 per cent on the fees charged by banks for the issue of cheques (loose or in book form); bring hotel rooms under Rs 1,000 per day under the 12 per cent GST slab as opposed to tax exemption category currently.