With effect from 10.10.2024, GST has been made applicable on renting commercial property under the Reverse Charge Mechanism by an unregistered person to the registered person. For this purpose, the following entry has been inserted in RCM Notification vide Notification No. Notification No. 09/2024 – Integrated Tax (Rate) dated 8th October 2024.
| (1) | (2) | (3) | (4) |
| 6AB | Service by way of renting of any property other than residential dwelling. | Any unregistered person | Any registered person |
However, confusion was spreading in the industry concerning the phrase “Any Property.” The interpretation was that renting any property (other than immovable property) shall come under the purview of the Reverse Charge Mechanism.
Therefore, to avoid confusion and misinterpretation, the CBIC has issued the corrigendum notification on 22nd October 2024 and the entry has been modified with the following phrase:
| (1) | (2) | (3) | (4) |
| 6AB | Service by way of renting of any Immovable property other than residential dwelling. | Any unregistered person | Any registered person |
Conclusion:
Corrigendum has ended the genuine doubt prevailing in the industry that GST under RCM shall apply on renting any kind of property (other than residential dwelling only). Now, GST under RCM shall apply only to the renting of commercial immovable property by an unregistered person to the registered person with effect from 10.10.2024.
