RCM Entries 5A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rent is the one input almost every business pays, and it now sits under three different reverse charge entries. They were inserted seven years apart, they answer different problems, and each has a boundary the others do not.
Entry 5A (inserted 25.01.2018) covers renting of immovable property by government or a local authority to a person registered under the CGST Act — with the Ministry of Railways excluded from 20.10.2023. Entry 5AA (inserted 18.07.2022) covers renting of a residential dwelling by any person to a registered person, subject to the proprietor-in-personal-capacity explanation inserted w.e.f. 01.01.2023. Entry 5AB (inserted by Notification No. 09/2024-CT(Rate) w.e.f. 10.10.2024) covers renting of any immovable property other than a residential dwelling by an unregistered person to a registered person — and since 16.01.2025 a composition dealer is excluded from it.
Entry 5A: government as landlord
The entry reads: services supplied by the Central Government , State Government, Union territory or local authority by way of renting of immovable property to a person registered under the CGST Act.
Inserted by Notification No. 3/2018-CT(Rate) dated 25.01.2018, w.e.f. the same date. The Railways exclusion came in by Notification No. 14/2023-CT(Rate) w.e.f. 20.10.2023, consistent with the general move of Indian Railways to forward charge.
Note the recipient limb. Entry 5A is triggered by registration, not by being a business entity. A registered person taking premises from a municipal corporation pays; an unregistered person does not, and government charges forward.
"Renting of immovable property" is defined, in the explanation to Notification No. 16/2018-Integrated Tax (Rate), to mean "allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property", and to include letting, leasing, licensing or other similar arrangements.
That definition is wide on purpose. A leave-and-licence, a conducting arrangement, a right to occupy a counter or a kiosk, a shared-premises permission — all are renting. The absence of a lease deed, or of exclusive possession, does not take an arrangement outside it.
Entry 5AA: residential dwelling to a registered person
Inserted by Notification No. 5/2022-CT(Rate) dated 13.07.2022, w.e.f. 18.07.2022, alongside the narrowing of exemption entry 12.
The history explains the shape. Renting a residential dwelling for use as residence was exempt under entry 12 of Notification No. 12/2017-CT(Rate). The GST Council at its 47th meeting (28-29 June 2022) recommended withdrawing that exemption where the dwelling is supplied to a business, because the object of the exemption had been to spare individuals and non-commercial persons the tax. So entry 12 was amended by Notification No. 4/2022-CT(Rate) to read "Services by way of renting of residential dwelling for use as residence except where the residential dwelling is rented to a registered person", and Entry 5AA was inserted to collect the tax from the tenant.
"Residential dwelling" is not defined in GST. Both the Handbook and Volume I fall back on trade parlance: all residential accommodation other than a hotel, motel, inn, guest house, campsite, lodge, houseboat or like place meant for temporary stay.
The proprietor problem, and its fix. The amended entry 12 immediately raised a question: what of a proprietor of a proprietorship firm who rents a house in his personal capacity for his own residence, where the firm is a registered person? On the 48th Council meeting's recommendation (17.12.2022), an Explanation was inserted by Notification No. 15/2022-CT(Rate) dated 30.12.2022 w.e.f. 01.01.2023: the exemption is available where the renting is on personal account and not on account of the business — that is, not accounted for in the books of the firm.
So Entry 5AA now has four conditions, as Volume I sets them out:
- the property is a residential dwelling;
- the supplier (landlord) may be any person, registered or not;
- the recipient (tenant) is a registered person; and
- the renting is not by a registered person who is the proprietor of a proprietorship concern renting in his personal capacity for his own residence on his own account.
The books of account are the evidence. Where the rent is debited to the firm, condition four fails and Entry 5AA applies.
On PGs and serviced apartments the Handbook records a genuine split. Opinions differ because the phrase "per day or equivalent thereof" does not permit a straightforward daily-rate computation where the contract does not offer accommodation on a per-day tariff.
Entry 5AB: everything else, from an unregistered landlord
This is the newest and, for most businesses, the most consequential of the three.
Inserted by Notification No. 09/2024-Central Tax (Rate) dated 08.10.2024, with effect from 10.10.2024. As originally notified the description read "any property"; a Corrigendum dated 22.10.2024 corrected it to "any immovable property".
The entry: service by way of renting of any immovable property other than a residential dwelling, supplied by any unregistered person, to any registered person .
The purpose is stated plainly in Volume I: to address revenue leakage, by ensuring that renting transactions with unregistered landlords bear tax through a shift of liability to the registered tenant.
What it reaches. Volume I lists examples: commercial spaces, warehouses, industrial buildings, and vacant plots intended for commercial use. Residential dwellings are expressly excluded because Entry 5AA governs them.
The composition carve-out. The words "other than a person who has opted to pay tax under composition levy" were inserted by Notification No. 07/2025-Central Tax (Rate) dated 16.01.2025. From that date, a composition dealer is no longer liable to discharge GST under RCM on renting of commercial immovable property from an unregistered person. That mattered: reverse charge in a composition dealer's hands is paid at the ordinary rate, in cash, with no credit under section 10(4) — a pure cost on the smallest taxpayers for the commonest of business inputs, the shop itself.
How the three entries divide the field
| Landlord | Property | Tenant | Entry |
|---|---|---|---|
| Central/State Govt, UT, local authority (not Railways) | Any immovable property | Registered person | 5A |
| Any person | Residential dwelling | Registered person (subject to the proprietor explanation) | 5AA |
| Unregistered person | Any immovable property other than a residential dwelling | Registered person, not a composition dealer | 5AB |
| Registered person | Other than a residential dwelling | Anyone | Forward charge |
Read the table for what is absent. A registered landlord letting commercial property charges GST in the ordinary way — 5AB does not touch it. And an unregistered landlord letting residential property to a registered tenant is under 5AA, not 5AB, because 5AB excludes residential dwellings.
The director's flat: how 5AA and Entry 6 interact
A recurring question is whether renting by a director to his company is a director's service under Entry 6.
It is not. Circular No. 201/13/2023-GST dated 01.08.2023, on the 50th Council's recommendation, clarified that services supplied by a director to the company in his private or personal capacity, such as renting of immovable property, are not taxable under RCM under Entry 6. Only services supplied as or in the capacity of director fall in Entry 6.
But the Handbook completes the thought: if a director's residential property is let to a company registered under GST in his personal capacity, "though this transaction does not fall under the ambit of entry 6 but will fall under entry 5AA" provided the conditions of that entry are satisfied. And if it is commercial property and the director is unregistered, Entry 5AB answers it. Director services and the personal-capacity line →
Key takeaways
- Entry 5A — government or local authority landlord, registered tenant; Railways excluded from 20.10.2023.
- "Renting" is defined widely — access, entry, occupation or use, with or without transfer of possession, including licensing.
- Entry 5AA — residential dwelling, any landlord, registered tenant; exempt where a proprietor rents in personal capacity on personal account (explanation w.e.f. 01.01.2023).
- Entry 5AB — unregistered landlord, immovable property other than a residential dwelling, registered tenant; inserted w.e.f. 10.10.2024 by Notification No. 09/2024-CT(Rate).
- A composition dealer is excluded from 5AB from 16.01.2025 by Notification No. 07/2025-CT(Rate).
- A registered commercial landlord charges forward — 5AB does not apply.
- A director's flat let personally is 5AA, not Entry 6 — Circular No. 201/13/2023-GST.
Read next
- RCM Entry 5: Government Services to a Business Entity
- RCM Entry 6: Director Services and the Personal-Capacity Line
- RCM Entries 5B and 5C: TDR, FSI and Long-Term Lease in a Promoter's Hands
Disclaimer: Positions stated as on 5 September 2026, based on entries 5A, 5AA and 5AB of Notification No. 13/2017-Central Tax (Rate) as inserted and amended by Notification Nos. 3/2018, 5/2022, 15/2022, 14/2023, 09/2024 (with Corrigendum dated 22 October 2024) and 07/2025-Central Tax (Rate), entry 12 of Notification No. 12/2017-Central Tax (Rate), and Circular No. 201/13/2023-GST, as reproduced in the ICAI Handbook on Reverse Charge under GST (2nd edition, February 2025) and the ICAI Background Material on GST, Volume I.