Reverse Charge Under GST on Services & Renting of Immovable Property :
There is grand confusion regarding GST on Services under RCM & GST on Renting of Immovable Property.
Let's
Clarify.
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Schedule II of Section 7 of CGST gives the list of activities that will be treated as supply of goods or supply of services
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Subsection 4 of Section 9 of CGST states that "The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both."
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Subsection 3 of Section 9 of CGST gives power to Government, on recommendation of council to notify goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both. In exercise of above power Government has issued notification dated 28th June 2017 No. 13/2017 - Central Tax (Rate) Analysis of the above:
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All the taxable services procured from unregistered person by registered person gets covered under RCM .
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GST on taxable services as contained in above mentioned notification
has to be paid under RCM even though the same is procured from
Registered Person.
Thus all the services which are not contained in above notification
are also taxable and has to be paid under RCM if procured from
unregistered supplier.
Renting of Immovable Property:
Schedule II of Section 7 of CGST defines Renting of Immovable
Property as supply of Services
By virtue of Section 9(4) of CGST, GST on rent has to be paid under
RCM by registered person, if the rent is paid by registered person
to unregistered person.
However renting of residential dwelling for use as residence is not
subject to GST
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