GST Not Payable On House Rented To Proprietor For Residential Purpose

From January 1, GST would not be payable on housing units rented to the proprietor of a proprietary concern for residential usage only, the CBIC has said.


The Central Board of Indirect Taxes and Customs (CBIC) also notified amendments in GST rates effective from January 1, 2023, for certain goods and services, as per the recommendations of the GST Council in its meeting on December 17.


Beginning on January 1, ethanol sold to refineries for blending with motor spirit (petrol) will be subject to 5% GST rather than the existing 18%. Additionally, the tax rate on pulse husks has been reduced from 5% to 0%.




The announcement further specifies that “Fruit pulp or fruit juice-based drinks” are subject to a 12 percent GST (other than carbonated beverages).


The CBIC has also notified that with effect from January 1, 2023, no GST would be payable where the residential accommodation is rented to a proprietor of a registered proprietary concern if such accommodation has been rented in his individual capacity to be used as his residence only.




However, the proprietor would be liable to pay GST on a reverse charge mechanism (RCM) basis at 18 percent if such accommodation is used for his proprietary concern.


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“This is a fair notification that would maintain a tax-neutral status for renting residential accommodation to proprietors of the proprietary concern for residential use only.”