A Doctor owns commercial property maintained a private hospital up to 31-03-24 gst non registered after dt:01-04-24 from hospital rent to another doctor rs:10 lacs rent per month.
Question:
Rental income land lord gst registered compulsory
2.gst tax payment for landlord or tenant and RCM or fcm applicable in gst act.
The query is about the applicability of GST (Goods and Services Tax) on rental income when a doctor owns a commercial property and rents it to another doctor. Here’s a breakdown of the two parts of the question based on the details provided:
1. Is GST Registration Compulsory for the Landlord?
- As per GST laws in India, if a person has an annual turnover exceeding the threshold limit, they are required to register for GST.
- For services (including rental income), the GST registration threshold is ₹20 lakhs (or ₹10 lakhs in special category states) in a financial year.
- In this case, the rental income is ₹10 lakhs per month, which totals ₹1.2 crores annually, well above the threshold limit.
- Conclusion: The doctor (landlord) is required to compulsorily register for GST as their rental income exceeds the threshold of ₹20 lakhs per annum.
2. GST Tax Payment and Reverse Charge Mechanism (RCM) or Forward Charge Mechanism (FCM) Applicability
- What is Forward Charge Mechanism (FCM): In the forward charge mechanism, the supplier is liable to collect and pay GST.
- What is Reverse Charge Mechanism (RCM): In RCM, the recipient of the service is liable to pay GST instead of the supplier.
- In the case of renting immovable property for commercial purposes (such as renting a commercial building to another doctor for private hospital purposes), the forward charge mechanism (FCM) is applicable.
- Therefore, the landlord (doctor who owns the property) will charge GST on the rental income and is responsible for depositing it to the government.
- The tenant (other doctor renting the property) can claim Input Tax Credit (ITC) on the GST paid, if they are GST registered.
GST Rate on Commercial Rent: The current GST rate on commercial property rental is 18%.
Hence
- The landlord must charge 18% GST on the monthly rental income of ₹10 lakhs (i.e., ₹1.8 lakhs of GST per month).
- This will be under the Forward Charge Mechanism (FCM), where the landlord collects and pays GST.
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SAC Code 997212:
- Description: “Rental or leasing services involving own or leased non-residential property.”
- GST Rate: 18% (as applicable for commercial rental services).