GST on Rent in India — Commercial & Residential Property Rules
Updated: 3 June 2026 | CGST Act 2017 | Includes RCM changes from 18 July 2022
GST on rent in India: Commercial property rent is taxable at 18% GST if the landlord is GST-registered. Residential property rented to a GST-registered business (company, LLP, proprietor) attracts 18% GST under Reverse Charge Mechanism (RCM) — payable by the tenant directly to the government (since 18 July 2022). Residential property rented to an unregistered individual for personal use is completely exempt from GST regardless of rent amount. Landlord must register for GST if commercial rental income exceeds ₹20 lakh per year.
18%
GST rate on all taxable rent transactions — commercial and residential-to-business
SAC Code: 997212 (rental services for residential), 997211 (non-residential / commercial). Both attract 18%.
SAC Code: 997212 (rental services for residential), 997211 (non-residential / commercial). Both attract 18%.
⚠
RCM alert for businesses renting flats. Since 18 July 2022, if your company or LLP takes a residential flat on rent (for office, guest house, or employee accommodation), you must pay 18% GST under RCM even if the landlord is unregistered. ITC on this RCM GST is blocked — you cannot recover it. This is a compliance risk often missed by small businesses and startups.
All Rental Scenarios at a Glance
18% GST
Commercial property → Any GST-registered tenant (Forward Charge)
Landlord charges 18% GST on invoice. Tenant (if registered) can claim ITC. Landlord must be registered if rent > ₹20L/year.
18% RCM
Residential property → GST-registered business (Reverse Charge)
Tenant pays 18% GST directly to government under RCM (Section 9(3)). Applies to companies, LLPs, firms, and registered proprietors. Landlord does NOT charge GST. ITC on this RCM GST is blocked.
No GST
Residential property → Unregistered individual (for personal living)
Completely exempt from GST. No GST regardless of monthly rent (₹10K, ₹1L, or any amount). Landlord need not register solely on account of this income.
No GST
Landlord with rental income below ₹20L/year
Even if renting commercial property, a landlord with aggregate turnover below ₹20L per year (₹10L in special category states) is not required to register for GST and cannot charge GST.
GST on Rent — Complete Reference Table
| Tenant Type | Property Type | GST Applicable? | Rate | Who Pays GST | ITC Available? |
|---|---|---|---|---|---|
| Any GST-registered business | Commercial (shop/office/warehouse) | Yes | 18% | Landlord (Forward Charge) | Yes — full ITC |
| Company / LLP / Registered Firm | Residential (flat/house) | Yes (RCM) | 18% | Tenant under RCM | Blocked — Sec 17(5)(g) |
| Registered Sole Proprietor | Residential — for employee housing | Yes (RCM) | 18% | Tenant under RCM | Blocked |
| Salaried Individual (unregistered) | Residential (any) | No | Nil | N/A | N/A |
| Unregistered individual | Commercial | No* | Nil | N/A | N/A |
| NGO / Charitable Trust (registered) | Commercial | Yes | 18% | Landlord (if registered) | Depends on use |
* Unless tenant is GST-registered, in which case RCM may apply on commercial rent from unregistered landlord.
Landlord GST Registration Threshold
A landlord is required to register for GST and collect/remit GST on commercial rent when aggregate turnover (all supplies: rent + any other business income) exceeds:
- ₹20 lakh/year — for most states
- ₹10 lakh/year — for special category states (Manipur, Mizoram, Nagaland, Tripura, Uttarakhand, Himachal Pradesh, Sikkim, Arunachal Pradesh, Meghalaya)
A landlord with only residential rental income to unregistered individuals is outside the GST net entirely and does not need to register regardless of rental amount.
ITC on Rent — When Can You Claim It?
| Scenario | ITC Eligible? | Reason |
|---|---|---|
| GST paid on commercial office/shop rent | Yes | Used for business — normal B2B ITC rules apply |
| GST (RCM) paid on residential flat rented for employees | No | ITC blocked under Section 17(5)(g) — personal use / employee benefit |
| GST paid on warehouse / godown rent | Yes | Used for business (storage) — ITC eligible |
| GST (RCM) on residential flat used as registered office | No* | ITC generally blocked; position debated in case law |
* Consult a GST practitioner for registered office use — AAR rulings are mixed on this issue.
Post July 2022 change: Before 18 July 2022, residential property rented to a registered business was exempt from GST. The 53rd GST Council recommendation and corresponding CBIC notification changed this — making registered tenants liable to pay 18% GST under RCM on residential rent. Ensure your GST returns (GSTR-3B) reflect self-assessed RCM liability if applicable.
Frequently Asked Questions
Is GST applicable on shop or commercial premises rent?
Yes. GST at 18% is applicable on rent received for commercial properties (shops, offices, warehouses, showrooms, factories) if the landlord's aggregate turnover (including rent) exceeds ₹20 lakh per year (₹10L in special category states). If the landlord is GST-registered, they must charge 18% GST on rent invoice and file GST returns. The tenant (if GST-registered) can claim Input Tax Credit (ITC) on the GST paid on commercial rent, as it is used for business purposes. If the landlord is not registered (rent income below ₹20L), no GST is charged.
Is there GST on residential property rented to a company or LLP?
Yes — under Reverse Charge Mechanism (RCM) from 18 July 2022. If a GST-registered business (company, LLP, partnership, or sole proprietor under GST) rents a residential property (flat, house, apartment) for any purpose — including as employee accommodation or a guest house — the tenant must pay 18% GST under RCM directly to the government. The landlord does not charge GST; instead, the tenant self-assesses and pays. Importantly, ITC on this RCM GST is blocked because the residential accommodation is treated as personal-use input (Section 17(5)(g) of CGST Act) — you cannot set it off against output tax.
Can I claim ITC on GST paid for commercial office rent?
Yes. GST paid on commercial premises rent (offices, shops, warehouses) is fully eligible for Input Tax Credit under normal B2B ITC rules, provided: (1) you are GST-registered and the premises is used for business, (2) the landlord has issued a valid GST tax invoice, (3) the landlord has filed GSTR-1 and the invoice appears in your GSTR-2B. ITC on commercial rent can be used to offset your GST output tax liability (on sales or services). However, ITC is blocked for residential property rentals used as employee accommodation — that GST (under RCM) cannot be claimed back.
What is the GST threshold for a landlord renting out property?
A landlord must register for GST and charge GST on rent when aggregate turnover (all supplies including rental income) exceeds ₹20 lakh per year (₹10 lakh in special category states like Manipur, Mizoram, Nagaland, Tripura). If a landlord has only residential rental income to individuals who are not GST-registered, there is no GST at all regardless of rental amount. If a landlord has commercial rental income exceeding ₹20L, they must register and charge 18% GST. Voluntary registration is possible even below the threshold.
If I rent my flat to a salaried individual, is GST applicable?
No. Rent of residential property to an individual who is NOT GST-registered is completely exempt from GST — there is no GST regardless of the monthly rent amount. This is one of the clearest exemptions in GST: residential dwelling rented to an unregistered individual is outside the GST net. The 18% RCM GST provision applies only when the tenant is a GST-registered business entity (company, LLP, registered proprietor). A salaried person without GST registration renting a flat for personal living pays zero GST on rent.
Related Pages
GST Registration
GST Return Filing
Reverse Charge (RCM)
Input Tax Credit
GST on Services
Income Tax on Rental Income
GST Compliance for Property Owners & Tenants
Get expert guidance on GST registration, RCM liability, ITC claims, and GST return filing for rental transactions.
Talk to a GST Expert →◆ Available in 71 Cities
Gst On Rent Near You
Expert CA/CS assistance for gst on rent across India. Click your city for local details.
→
New Delhi
→
Mumbai
→
Bengaluru (Bangalore)
→
Hyderabad
→
Chennai
→
Kolkata
→
Pune
→
Ahmedabad
→
Noida (UP)
→
Gurgaon (Gurugram)
→
Jaipur
→
Lucknow
→
Chandigarh
→
Surat
→
Kochi (Cochin)
→
Faridabad
→
Ghaziabad
→
Greater Noida
→
Panipat
→
Sonipat
→
Manesar (IMT)
→
Dharuhera
→
Mathura
→
Palwal
→
Agra
→
Kosi Kalan
→
Aligarh
→
Khair
→
Jewar (Noida International Airport)
→
Kanpur
→
Varanasi (Kashi)
→
Prayagraj (Allahabad)
→
Meerut
→
Bareilly
→
Moradabad
→
Gorakhpur
→
Firozabad
→
Saharanpur
→
Muzaffarnagar
→
Bulandshahr
→
Hapur
→
Karnal
→
Kurukshetra
→
Ambala
→
Hisar
→
Rohtak
→
Yamunanagar
→
Rewari
→
Bhiwani
→
Jodhpur
→
Udaipur
→
Kota
→
Ajmer
→
Bikaner
→
Ludhiana
→
Amritsar
→
Jalandhar
→
Patiala
→
Mohali (SAS Nagar)
→
Bathinda
→
Dehradun
→
Haridwar
→
Rudrapur
→
Shimla
→
Solan (Baddi-Barotiwala-Nalagarh)
→
Bhopal
→
Indore
→
Gwalior
→
Jammu
→
Srinagar
→
Panchkula