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The Owner is Liable to Pay the GST on a Forward Charge Basis When the Property is Rented for Commercial Purposes

Rajasthan GST AAR's Order for MS Deepak Jain

In the case of In Re: M/s. Deepak Jain- 2023 (12) TMI 150, the Authority for Advance Ruling (AAR), Rajasthan, stated that when a residential property is rented out for commercial purposes, the Lessor is responsible for paying GST on a forward charge basis.

Read Also:- An Overview of GST Liability U/S 85 for Business Transfer

Here Are the Key Facts Related to the Case:

The applicant, M/s. Deepak Jain, a practicing Chartered Accountant but not registered under the GST Act. The person applying, along with other family members, possesses a property in Jaipur.

Although the premises have a residential land use designation according to the lease deed issued by the Jaipur Development Authority to the applicant who is registered under the GST Act, the lease agreement with Back Office IT Solution Pvt. Ltd. states that the premises will be used exclusively for commercial purposes.

The Matter:

The matter under consideration is whether the property owner, in this particular situation, is obligated to pay GST in advance when renting out a residential property for commercial purposes.

The AAR, Rajasthan, made the Following Rulings:

Applicant NameM/s DEEPAK JAIN
GSTIN of the applicantUn registered
Date29.11.2023
ApplicantC.A Deepak Jain
Rajasthan AARRead Order
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