In June, the 47th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, authorised a number of amendments to the taxation system. The changes become effective on July 18, 2022.

The requirement that a GST-registered renter pay Goods and Services Tax at the rate of 18% when renting a residential property was one of the most important changes.

Prior to June 18, 2022, residential property was exempt from all taxes, regardless of whether the landlord or renter was registered for GST or not.

Commercial real estate is subject to the GST, and it will continue to do so even after June 18, 2022. When the landlord is a registered GST user, the GST is applicable to commercial property. When a landlord’s annual revenue exceeds Rs. 20 lakhs for services and Rs. 40 lakhs for the delivery of products, they are required to register for the GST.

Regardless of whether the tenant is registered or not, if the landlord leases out a business property and is registered for GST, the landlord will charge the renter 18% GST.

According to the new regulations starting on June 18, 2022, regardless of whether the landlord is GST-registered or not, if the renter of the residential property is GST-registered, they must pay 18% GST. The GST must be paid through the reverse charge method (RCM), which requires that the tenant pay the government directly.

For instance, if a business rents a guesthouse or a residential home for the use of its employees, the business is required to pay 18% GST. The employee is not required to pay GST if they directly rent a residential property.

When renting a residential property, tenants who are GST-registered are required to pay GST. Companies, small businesses operating in residential properties, online content producers that produce movies, etc., as well as business experts like CPAs, attorneys, architects, and business consultants may all be considered tenants registered under GST.

Situations Where Tenants Are Not Required to Pay GST on Residential Property

  1. When renting a residential property, tenants who are not registered for the GST are exempt from paying it.
  2. The individual in the salaried class is exempt from paying GST while renting a home.


The following disclaimer governs the use of this website (“Website”) and the services provided by the Law offices of Kr. Vivek Tanwar Advocate & Associates in accordance with the laws of India. By accessing or using this Website, you acknowledge and agree to the terms and conditions stated in this disclaimer.

The information provided on this Website is for general informational purposes only and should not be considered as legal advice or relied upon as such. The content of this Website is not intended to create, and receipt of it does not constitute, an attorney-client relationship between you and the Law Firm. Any reliance on the information provided on this Website is done at your own risk.

The Law Firm makes no representations or warranties of any kind, express or implied, regarding the accuracy, completeness, reliability, or suitability of the information contained on this Website.

The Law Firm disclaims all liability for any errors or omissions in the content of this Website or for any actions taken in reliance on the information provided herein. The information contained in this website, should not be construed as an act of solicitation of work or advertisement in any manner.