CBIC has issued an important Circular on Regularizing payment of GST on RCM basis on renting of commercial property by an unregistered person to a registered person for taxpayers registered under composition levy.
CA Pratibha Goyal | Jan 28, 2025 |
![GST on RCM on Renting of Commercial Property: Exemption to Composition Taxpayer on as is where is basis [Read Circular]](/cdn-cgi/image/fit=contain,format=webp,gravity=auto,metadata=none,quality=80,width=1200,height=730/wp-content/uploads/2025/01/GST-on-RCM-on-Renting-of-Commercial-Property.jpg)
GST on RCM on Renting of Commercial Property: Exemption to Composition Taxpayer on as is where is basis [Read Circular]
The Central Board of Direct Taxes and Customs (CBIC) has issued an important Circular No. 245/02/2025-GST dated 28th of January, 2025, regarding Regularizing payment of GST on a Reverse Charge (RCM) basis on renting of commercial property by an unregistered person to a registered person for taxpayers registered under composition levy.
Based on the recommendations of the 54th GST council held on 09.09.2024, renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person was brought under reverse charge basis.
The said recommendation was notified vide notification No.09/2024-CTR dated 08.10.2024 effective from 10.10.2024 by inserting an entry at Sr. No. 5AB of the notification No. 13/2017-CTR dated 28.06.2017 thereby prescribing payment of GST on reverse charge basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person.
Various representations from different sectors were received requesting to bring the service of renting of commercial property by unregistered person to registered person under Forward Charge basis.
The 55th GST Council in its meeting held on 21.12.2024 recommended that taxpayers registered under composition levy may be excluded from the entry at Sr. No. 5AB of the notification No. 13/2017-CT(Rate) dated 28.06.2017. The same has been notified vide notification No. 07/2025-CT(Rate) dated 16.01.2025. The Council further recommended that payment of GST on reverse charge basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to a registered person for taxpayers registered under composition levy may be regularized on ‘as is where is’ basis for the intervening period (i.e., date of effect of notification No. 09/2024-CTR dated 08.10.2024 to date of issuance of amending notification No. 07/2025-CT(Rate) dated 16.01.2025).
Read Notification exempting Composition Taxpayer from levy of RCM
Thus, as recommended by the 55th GST Council, payment of GST on Reverse Charge (RCM) basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person under composition levy is hereby regularized for the period from 10.10.2024 to 15.01.2025 on ‘as is where is’ basis.
For Official Circular Download PDF Given Below:
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