A tenant, who is registered under the GST, is required to pay Goods and Services Tax at 18 percent for renting a property, according to the new GST rules.
According to the reports, the 18 percent is only applicable to the tenants registered under the GST. Earlier, only commercial properties like offices or retail outlets were given on rent or lease and attracted GST. There was no GST on rent or lease of residential properties. But, As per the new rules, a GST-registered tenant will be liable to pay the tax under the reverse charge mechanism (RCM).
Under the GST law, registered persons include individuals and corporate organizations. The GST registration is required when a person carrying out business or profession reaches an annual turnover of more than the doorstep limit.