Is RCM exception applicable on rent?

yes exception under section 9(4) of CGST Act applies on all transactions except section 9(3) thus in your case Rent is also include in exemption if below 5000.

RCM is applicable Registered to Unregistered transactions irrespective of B2B or B2C

1. Split the rent receipts to periods for which the rent would be less than 5000. Example, if rent is 10000 per month, provide for the rents twice a month. The same can be provided in the rental agreement to avoid future litigation.

2. Yes, reverse charge is applicable.

Dear Tax Payer,

As per Notification No.8/2017-Central Tax (Rate) dated 28 June 2017, exempts intra-State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017): Provided that the said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds five thousand rupees in a day.

Answer to your query:

Is RCM 5000/- per day exception is applicable on rent also?

Yes,. It is applicable to rent also. However, if the rent is above Rs. 5,000, say Rs. 8000, you cannot split the rent expenses into 2 days and claim the benefit of this notification unless the rental agreement explicitly providing such rent accrual.

2) Is RCM applicable on unregistered B2b supplier, who also deals with 'Tour Packages'?

Yes. It is applicable to supplies from unregistered person who deals in tour packages as well.

Regards,

CA. Rajeev P T

If the deed provides for such payments, there's no doubt in the allowability.

Yes, the exemption is only for CGST. SGST part has to be paid in reverse charge.

Dear Tax Payer,

???We can modify in Rental deed accordingly but Can we transfer Split payments to the same person in same month?

No problem for split payments. As long as you dont cross 5,000 per day for all supplies (including rent) from unregistered person put together in a day. Please note that RCM liability and Rs. 5000 exemption is not based on your payment. It is based on accrual. Even if you are paying rent of Rs.8000 in a day but booked rent in your books based on the term of rental agreement say Rs. 5000 on 15th and Rs. 3000 on 30th, still you are eligible for Rs. 5,000 exemption notification.No need to pay CGST under RCM.

Is RCM exception only on CGST? If yes then we should pay RCM for SGST part?

No. This exemption is available for both CGST & SGST. To give more authentic information- For CGST exemption refer Notification No.8/2017-Central Tax (Rate) dated 28 June 2017.

For SGST Exemption - Refer respective state notification. Say In Tamil Nadu GO 69 dated 29 July 2017 which provides exemption of Rs. 5,000 per day. Likewise, all states would have issued this notification. Kindly check for this notification in your state GST website.

Regards,

CA. Rajeev P T

Hi,

Based on the past question, we understand that your rent is 8k per month. In that case you can revise your agreement and make it 4k in every 15 days.

In that case, you need not to pay cgst in reverse charge. For payment of sgst, please check in your state whether you have exemption from RCM or not?

Further, RCM is applicable on unregistered B2b supplier, who also deals with 'Tour Packages'

Please feel free to call/ revert in case you need more clarity.

Hello,

Yes, you can modify your rental deed and pay your rent on fortnightly or weekly basis.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Hello,

Yes, if you can modify the rental deed then you shall be in a position to split your payments and avoid RCM.

Query has already been taken care of by other experts. Please feel free to get back in case their is any unresolved part left.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B

Yes you can pay same supplier in 10 days and can avail benefit of Rs. 5000 of RCM

There has been no such notification by Andhra Pradesh government and hence SGST is to be paid in reverse charge.