Renting Guest House from Residential Bring GST Under RCM: Odisha AAR


Share post:

Arpit Kulshrestha

Unlimited Tax Return Filing

Odisha AAR's Order for M/s. Indian Metals and Ferro Alloys Ltd

Under Reverse Charge Mechanism (RCM), the Odisha Authority of Advance Ruling (AAR) held that GST should be levied on renting the residential premises on rent as a guest house.

Case Fact

  • As a guest house, the petitioner has given the premises on rent in New Delhi, Odisha, and Jajpur.
  • For the employees who visit their offices, the petitioner furnishes them with food and accommodation.
  • The owner is enrolled with one of the apartments while the other owner does not get enrolled.
  • The owner uses the houses for the purpose of rent, he furnishes the service of rent for both houses to guests.

Petitioner Opinion

  • In the Goods and Services Taxes (GST) or the former service tax act, the term residential dwelling does not get described.
  • But the education guide of the department elaborated on the phrase residential dwelling on 20th June 2012 as any residential accommodation which does not comprise a hotel, inn, motel, guest house, camp-site, houseboat, lodge, or other places for a temporary stay.

An advance ruling has been filed by the petitioner on whether the rented residences would be utilised as a guest house through the registered person who comes within the GST beneath the Forward Charge Mechanism (FCM) or RCM.

The AAR Ruled

  • The kind of rented properties seems to be the residential properties that have been utilised for commercial purposes.
  • GST shall be subject to be levied from 18th July 2022 for the residential property that has been given on rent to the registered individual.
  • Under Reverse Charge Mechanism (RCM) the liability to file the 18% GST shall be on the tenant when he would be the registered individual under GST.
  • The nature, purpose, and kind of the residential dwelling do not secure a condition in the RCM notification.
  • Thus a GST shall get imposed on renting a residential dwelling to the registered individual beneath RCM, irrespective of its nature of utilization.
Name of Applicant M/s. Indian Metals and Ferro Alloys Ltd
Date of Filing Form GST ARA-01 03.11.2022
Present for the Applicant R K Sahoo, Sr General Manager, A K Sahoo, Manager
Date of Personal Hearing 29.11.2022
Odisha AAR Read Order

Disclaimer:- “All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check.”

Published by Arpit Kulshrestha

Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous.
View more posts


Source link


Please enter your comment!
Please enter your name here


Related articles

Dashlane Password Manager Review: Dashing to the Top of Our List

Fergus O'Sullivan Rating: 9/10 ? 1 - Does not work 2 - Barely functional 3 - Severely lacking in most areas 4...

White House report says majority of cryptos have ‘no fundamental value’

Wayne Jones In a recent report, the White House made a concern against cryptos by claiming...

VoltUp, BSNL to set up electric vehicles battery swapping stations

Press Trust of India ( ) Battery-as-a-Service (BaaS) startup VoltUp has partnered with BSNL for setting...

MetaMask Partners With MoonPay To Enable Instant Crypto Purchases In Nigeria |

Jammy Hunts Crypto-related developments continue to gain more ground despite the recent market turmoil caused by...