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      • Do You Have To Pay 18% GST On House...
      Economy

      Do You Have To Pay 18% GST On House Rent? A FactCheck

      This applies to tenents who are registered under the GST and not to renters like salaried persons who are not GST-registered

      By - Mohammed Kudrati | 12 Aug 2022 12:45 PM GMT
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    • Do You Have To Pay 18% GST On House Rent? A FactCheck

      A viral claim on social media, stating that the government will be charging 18% Goods and Services Tax (GST) on the rent paid by residential tenants is misleading, as the GST will only be levied on those tenants who themselves are registered under the GST.

      This change largely applies to corporate entities, businesses or persons who are GST-registered, and are renting residential property. It will not apply to salaried individuals since they are not registered under the GST.

      According to the Central Board of Indirect Taxes, those businesses having a turnover exceeding ₹40 lakhs on the sale of goods and ₹20 lakh on the provision of services (or a mix of both) must register under the GST. Those businesses below this threshold may register voluntarily.

      This change came as a part of the 47th GST Council's meeting on June 29, recommending a set of changes on the GST levied on a variety of goods and services; all effective from July 18.

      Some of these changes included commonly used household goods such as pre-labelled and pre-packaged food items and hospital beds among other goods.

      The claim can be seen below. It was tweeted by political activist and Trinamool Congress (TMC) spokesperson Saket Gokhale, and was picked up by other users of social media. Gokhale's tweet implies that there is a blanket GST imposition on the rent paid by all tenants, which is misleading.

      His tweet can be seen below.

      The "registered tenant" clause is a clever word magic.

      It means EVERY freelancer, artist, writer, doctor, lawyer, and others who aren't full-time employed & don't have an office.

      If your main office is also your home, you're covered under this.

      — Saket Gokhale (@SaketGokhale) August 12, 2022

      Others too used it on social media.

      Your house rent will now go up by 18%.

      Modi govt will now be charging GST to tenants on their house rent.

      — Munmun Sahani (@MunmunSahani) August 12, 2022


      Aachedin by @narendramodi government :

      ● 18% GST on Rent even for Residential
      Property.

      — Aabid Mir Magami عابد میر ماگامی (Athlete) (@AabidMagami) August 12, 2022


      18% GST on House Rent in @narendramodi Govt

      Destroying the Country with
      The Rulling govt, #GodiMedia has an Important Contribution...

      Boycott all Such Broker #Media#Boycott_Godi_Media#MoodOfTheNation ❓ pic.twitter.com/dpUToZVDsn

      — SaifuddinAITC (@SR_Tmc007) August 12, 2022


      18% GST on Rent even for Residential Property is an example of #aachedin by @narendramodi government 🤔

      — MUDIT AGARWAL (@mudit_aggarwal) August 12, 2022

      Also Read: Amul Ad Targeting Modi Govt On GST? No, It's Utterly Butterly Fake

      FactCheck

      The decisions taken by the 47th GST Council removed the exemption on GST-registered entities from paying GST on the residential property occupied by them, effective July 18.

      Salaried individuals are not required to register for the GST and are thus not subject to these news rules, which can be read here.

      The GST-registered body as the tenant, would need to pay the GST, and not the landlord, even if the landlord is not GST-registered.

      Speaking to BOOM, Vishal Thakkar, chartered accountant and an author of several books on finance, said, "GST is usually collected and paid by the supplier and not the consumer. However GST on residential property by GST-registered persons is likely to be on reverse charge mechanism since it otherwise creates a loophole where the landlord will pay no GST, and businesses will get away with only paying rent"

      Those who run businesses from home would need to pay GST rent on residential property if they are GST-registered, but they can claim input tax credit on the same.

      "Those with GST-registered businesses will have to pay GST on their rent, but they can claim it as an input tax credit towards their business. Those without GST-registration need not pay GST on their rent", said Thakkar.

      The government has also called refuted these claims through their handle PIB Fact Check.


      Claim: 18% GST on house rent for tenants #PibFactCheck

      ▶️Renting of residential unit taxable only when it is rented to business entity
      ▶️No GST when it is rented to private person for personal use
      ▶️No GST even if proprietor or partner of firm rents residence for personal use pic.twitter.com/3ncVSjkKxP

      — PIB Fact Check (@PIBFactCheck) August 12, 2022

      The recent changes to the GST regime has given rise to its fair share of misinformation, and has been debunked by BOOM.

      Several users have previously falsely stated that GST would be levied on the services provided by crematoriums and burial grounds.

      Also Read: Claims Of 18% GST On Crematorium Services Are Misleading; Here's Why

      Social media users also stated that GST would be levied on the use of public toilets, which is also not true.

      Also Read: Viral Post Falsely Claims GST Imposed On Use Of Public Toilets



      Tags

      GSTGST CouncilGoods and Services TaxRent
      Read Full Article
      Claim :   18% on residential rent
      Claimed By :  Users of social media
      Fact Check :  Misleading
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