If the owner's aggregate turnover is less than Rs. 20 lakhs, he need not register and charge GST.
If you are registered under GST, you will have to charge GST under reverse charge mechanism @18%.
I am running software development and commercial office space is leased , I want to know that if it falls under GST or not, Monthly rent is 16000/- , I am deducting 10% TDS and making them transfer of 14400/- , Now I am not sure if GST is to be paid or not, I had talk with owner, they say that they dont fall under GST and they don't have to pay GST, my CA says that GST needs to be paid, if GST is not paid by the owner then I need to pay that it's reverse mechanism , And owner says that they consulted their CA and they are not liable to pay GST. What should I do now?
If the owner's aggregate turnover is less than Rs. 20 lakhs, he need not register and charge GST.
If you are registered under GST, you will have to charge GST under reverse charge mechanism @18%.
Hey I don't understand what is GST reverse charge mechanism, could you please elaborate what is that? and How it works? and what if owner isn't agreeing to pay GST?
The purpose of this mechanism is to increase the tax compliance and tax revenues taking unorganized sector in the ambit. If the service provider i.e. landlord is not registered under GST, the recipient of services i.e. You are liable to pay GST under reverse charge.
Whether or not the owner agrees, you'll have to charge GST if you're registered under GST.
You may claim such GST paid as Input tax credit.
Yes, I am registered under GST, I am running a startup, I can't afford to pay 18% extra GST from my pocket, you said I can claim such GST as Input Tax Credit, what does that actually means?
You must be paying gst on services provided by you (say 50000). You may take the input tax credit for the gst on rent paid under reverse charge (say 20000).
This means-
Your net gst liability = 50000-20000 = 30000
Your CA Is right you have to pay GST on rent under RCM , and take input tax credit , now your question is how input works -
You pay GST on telephone bills, banks , stationery which is your input GST and you are charging GST on your sales/services which is out put GST at the end of month you have to pay net GST to government I e Output-input and if Result comes negative then you can carry forward such input in next month
Yes, in this case, you have to pay GST under reverse charge.
Reverse charge is the case wherein instead if service provider, service receiver is liable to pay GST. It happens in cases wherein service are taken from unregistered suppliers.
You can pay GST and adjust that GST from your output tax liability.
Please feel free to call/ revert in case you need more clarity
Thanks and regards
Abhishek Dugar
CA CS B.Com
Commercial office leased falls under GST or not
U WILL PAY GST UNDER REVERSE CHARGE AND TAKE CREDIT...SO NO LOSS OF MONEY TO YOU
Every registered person (including composition dealer u/s 10) is required to pay GST on every inward supply (purchase) of goods or services from any unregistered person. The implication of this provision is that even if a registered person (GSTIN Holder) book expense of Rs. 10 say for tea/snacks in his accounts, he is required to pay tax on the same under reverse charge mechanism.
IT MEANS YOU LIABILITY TO PAY GST WILL REDUCED BY THIIS ITC
Hello,
If your owner is not registered under GST, then you will be liable to pay gst under RCM basis. Do not worry about the extra cost as will be elligible to adjust the same in your next returns.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP