The Government initially exempted the services by way of renting of residential dwelling for the residential purposes through the entry no. 12 of Notification 12/2017 Central Tax Dated 28.06.2017.
Eventually the Government has brought an amendment through the Notification no. 05/2022 dated 13.07.2022 Central Tax and included services by way of renting of residential dwelling to GST registered person by including Entry 5AA under the Reverse Charge Mechanism.
For Notification click the below link;
https://cbic-gst.gov.in/pdf/central-tax-rate/05_2022-ctr-eng.pdf
Hence, the services by way of renting of residential dwelling for either residential or commercial purpose to a GST registered person shall attract GST under the Reverse Charge Mechanism (RCM) in the hands of the Tenant w.e.f 18.07.2022. Whether the supplier of the renting services is registered or not is irrelevant.
For instance if a GST registered company takes a residential apartment on rent for the residential purposes of one of its employees, the company will now have to pay GST @ 18% on such rent under RCM.
The GST paid under RCM will be eligible for claim of ITC for that matter.
Further following table gives a complete clarity on the various situations and point of taxation for the levy of GST on the renting of residential dwelling services;
| S. No. | Purpose | Service Provider | Service Recipient | Person Responsible for Payment of GST |
| 1 | Residential | Unregistered | Registered | Service Recipient under RCM |
| 2 | Residential | Registered | Registered | Service Recipient under RCM |
| 3 | Commercial | Unregistered | Registered | Service Recipient under RCM |
| 4 | Commercial | Registered | Registered | Service Recipient under RCM |
| 5 | Residential/Commercial | Unregistered | Unregistered | No GST applicable |
| 6 | Residential | Registered | Unregistered | No GST applicable (Continues to remain exempted Entry 12 Notification no. 12/2017 dated 28.06.2017) |
| 7 | Commercial | Registered | Unregistered | Service Provider |
To view Notification no. 12/2017 click the below link;
https://www.cbic.gov.in/resources/htdocs-cbec/gst/Notification12-CGST.pdf