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GST on Residential Rent from 18th July 2022

Are you currently living in a rented house?

If so,

it's crucial for you to be aware of the latest GST updates.

Starting from July 18th, 2022, the government has implemented new GST regulations specifically for the "Renting of Residential Property." According to the notifications outlined in 05/2022 (Central Tax Rate) on July 13th, 2022, it is now taxable to provide the service of renting a residential dwelling to a registered person.

However, it's important to understand that this tax will not be applied in the traditional forward charge system. Instead, it will be implemented based on the Reverse Charge Mechanism (RCM).

What is Reverse charge Mechanism (RCM)?

Reverse Charge Mechanism (RCM) is a concept in taxation where the liability to pay taxes on a particular transaction is shifted from the supplier of goods or services to the recipient or buyer. In a traditional forward charge system, the supplier collects the tax from the buyer and remits it to the government. However, under the RCM, the recipient of the goods or services is responsible for paying the tax directly to the government instead of the supplier.

RCM is typically applied in specific scenarios, such as when services are availed from an unregistered dealer or in certain specified goods or services as notified by the government. The purpose of RCM is to ensure that tax compliance is maintained even in cases where the supplier may not be registered or where tax evasion risks exist.

In the context of the GST updates mentioned earlier, the renting of residential property to a registered person is subject to tax under the Reverse Charge Mechanism, which means that the recipient of the rental service is responsible for paying the applicable GST directly to the government.

Through notifications 05/2022 (Central Tax Rate) dated 13 July 2022, the following entries have been newly inserted in the list of services that attract GST on RCM basis (Original Notification 13/2017)


Category of Supply of Services

Supplier of Service

Recipient of Service


Service by way of renting of residential dwelling to a registered person.

Any Person

Any Registered Person



  • Registered under GST 

  • NOT Registered under GST

  • NO GST Liability

  • NO GST Liability


  • Registered under GST 

  • NOT Registered under GST

  • Liable for 18% GST on Rent

  • NO GST Liability

The responsibility for the GST liability lies solely with the tenant, and the property owner or landlord is not accountable for any circumstances related to this liability. Therefore, if you are a registered Goods & Service Tax (GST) holder and have rented a residential property, you are required to pay 18% GST on the rent starting from July 18, 2022.

It's important to note that even if the landlord or owner is registered under GST, it does not exempt or reduce the tenant's obligation. Tenants are obligated to pay GST on a reverse charge basis, which is compulsory.

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