Fact check: The claim that all the tenants will have to pay 18% GST on rent is MISLEADING.
July 1, 2022 marked the completion of five years of India’s Goods and services Tax law. 47th GST council meeting was scheduled at Chandigarh on 28th and 29th June 2022.
July 1, 2022 marked the completion of five years of India's Goods and services Tax law. 47th GST council meeting was scheduled at Chandigarh on 28th and 29th June 2022. Several social media users citing an article claimed that all tenants would be charged 18 % GST on house rent under the revised tax rates.
The claim viral on Facebook and also Twitter goes as "Attention: Your house rent will now go up by 18%.
Why? Because the Modi govt will now be charging GST to tenants on their house rent.
Amidst a massive price rise, the cruel money-grabbing Modi govt is determined to squeeze every penny out of the pockets of ordinary Indians.
It means EVERY freelancer, artist, writer, doctor, lawyer, and others who aren't full-time employed & don't have an office.
If your main office is also your rented home, you're covered under this."
Fact check:
The claim that all the tenants will have to pay 18% GST on rent is MISLEADING. Only the individuals who are registered themselves as businesses under GST will be liable to 18% GST.
The claim is being shared along with a screenshot of an article of NDTV profit, which was published on August 12, 2022.
According to the reports, The government has clarified on the new GST or goods and services tax rules on rent, which came into effect from 18th July. In a tweet, PIB said that "renting of residential unit taxable only when it is rented to business entity️." It further clarified that "no GST when it is rented to private person for personal use; no GST even if proprietor or partner of firm rents residence for personal use."
According to tax experts, until 17th July 2022, GST was applicable on the rent of a commercial property but from 18th July 2022, GST shall be charged if such residence is rented or leased by a GST-registered person/entity. As recommended at the 47th GST Council meeting, the tenant should pay 18 per cent GST on a reverse charge basis (RCM). However, they can claim this value as a deduction while they pay tax on sales in GST returns.
This tax will only be applicable to GST-registered tenants who offer services from the rented residential property, and will not incur the tax if the house is used for residential purposes.
Here is the press release of the recommendations of 47th GST Council meeting by Press Information Bureau:
https://pib.gov.in/Pressreleaseshare.aspx?PRID=1838020
In a tweet, the government said GST would be levied only when the residential unit is rented out to a business entity.
"No GST when it is rented to private person for personal use. No GST even if proprietor or partner of firm rents residence for personal use," it said.
Hence, the claim that all the tenants will have to pay 18% tax on their rent is MISLEADING.