I have a proprietorship in the media business. My business's GST is based on/attached to my individual PAN number. In a separate situation, I have taken a property on rent from my father and sub-rented it out to another business. I am earning rental income from it. My tenant is a private tuition company. It is commercial rent but his business and my business have nothing to do with each other. But since my GSTN is associated with my individual PAN, I am getting conflicting advices. Am I supposed to charge my tenant GST since it is commercial rent and I already have GSTN, or am I not because my GSTN is for my business and this rental income is a totally different stream of income for me which has nothing to do with my business? Last year since I was in a hurry I went ahead and filed GST return as if I had charged him GST. But he did not pay GST as he did not have a GST registration. I paid the GST amount from my own pocket. Now he has GSTN but is not keen on paying GST. Our agreement did not mention GST. Will there be a problem with mismatch if I dont charge/file GST for it from this year onwards since I filed GST for the same rental income last year?
Yes you have to charge GST on such tuition person as you already have GST. Why is your father not renting it out directly? Is the property residential or commercial?
You should either charge GST or consider the amount paid by him as inclusive of GST.
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Since your rental income is from commercial property and you already have a GST registration for your media business, you are required to charge GST on the rental income, irrespective of whether it's related to your primary business activity or not.
GST Obligation: Continue charging GST on the commercial rent because the GSTN linked to your PAN mandates GST collection on all applicable transactions, including commercial rentals.
Rental Agreement: Update your rental agreement to explicitly include GST. This will clarify obligations for both parties and help ensure that the GST is collected and remitted properly.
Addressing Past GST Payments: Given that you paid GST out of pocket last year, you should formalize this in your agreements and ensure GST is clearly stated and charged going forward to prevent financial losses.
For detailed, personalized advice, consider a phone consultancy.
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Shubham Goyal
You need to charge GST compulsory. Since commercial rent attracts GST and you already have GSTN number. The terms of GST not mentioned in Rental Deed is point of discussion between you and your tenant. He can claim input of the same.
- It is a supply of services liable to GST irrespective of GST registration of tenant. If there is no reference of GST in the rent agreement then rent will be considered inclusive of GST.
- Amend the clause of rent amount with the supplementary agreement. Tenant can avail ITC on GST paid to you
For detailed discussion you may opt for phone consultation
