The four situations
| Property and parties | GST | Who pays |
|---|---|---|
| Residential dwelling, rented for residence to an unregistered tenant | Exempt | No one |
| Residential dwelling rented to a GST-registered tenant | 18% | Tenant, under reverse charge (from 18 July 2022) |
| Commercial property, registered landlord | 18% | Landlord charges it on the invoice (forward charge) |
| Commercial property, unregistered landlord, registered tenant | 18% | Tenant, under reverse charge (from 10 October 2024) |
Residential property
Renting a residential dwelling for use as a residence is exempt. From 18 July 2022 the exemption no longer applies where the dwelling is rented to a registered person, and the tenant pays 18% under reverse charge (Notifications 04/2022 and 05/2022-Central Tax (Rate)). Buying rather than renting? See GST on buying a flat.
From 1 January 2023 there is an exception: a registered proprietor who rents a home in a personal capacity, for his own residence and on his own account, does not pay the reverse charge. A company or LLP renting a flat as a guest house or for an employee does pay it.
Commercial property
- Registered landlord: charges GST at 18% on the rent. A landlord whose rent and other taxable turnover crosses the registration limit must register; rent counts towards aggregate turnover.
- Unregistered landlord, registered tenant: from 10 October 2024 the tenant pays 18% under reverse charge (Notification 09/2024-Central Tax (Rate)). Notification 07/2025-Central Tax (Rate) of 16 January 2025 excluded composition taxpayers from this reverse charge.
- Input tax credit: a tenant using the premises for business can generally claim credit for GST paid on commercial rent, including under reverse charge, subject to the usual conditions in sections 16 and 17.
Short-stay accommodation such as hotel rooms is a different service with its own rates, and is not covered here.
Paying reverse charge as a tenant
- Issue a self-invoice for rent paid to an unregistered landlord, and a payment voucher.
- Pay the reverse charge in cash through GSTR-3B; it cannot be paid from your credit ledger.
- Claim the credit in the same return, where eligible.
- Keep the rent agreement and payment records with each month's working.
Missed reverse charge carries interest at 18% a year; see our GST late fee calculator. To work out GST on a rent amount, use the GST calculator.
Talk to Regikart
We check whether your lease attracts GST, register landlords who cross the limit, and set up reverse charge entries for tenants. See GST registration and GST return filing, or call or WhatsApp +91 70444 94804.
Frequently asked questions
Is GST applicable on residential rent?
Not when a home is rented for residence to an unregistered person. If the tenant is GST-registered, the tenant pays 18% under reverse charge, except a proprietor renting for personal residence.
What is the GST rate on commercial rent?
18%. A registered landlord charges it; where the landlord is unregistered, a registered tenant pays it under reverse charge from 10 October 2024.
Does a composition dealer pay reverse charge on commercial rent?
No. Notification 07/2025-Central Tax (Rate) excluded composition taxpayers from reverse charge on renting of commercial property by unregistered persons.
Can I claim ITC on GST paid on office rent?
Generally yes, if the premises are used for business and the conditions in sections 16 and 17 of the CGST Act are met.
Does a landlord need GST registration?
Yes, once aggregate turnover, including commercial rent, crosses the registration limit. Exempt residential rent also counts towards aggregate turnover.
About the author
Regikart CA Team
Chartered Accountants at Regikart. Want to discuss this in the context of your business?
