Reverse charge— In the instant case, the applicant has sought for an advance ruling in respect of the following question.
Q. Whether Service Received by a registered person by way of renting of residential premises used as guest house of the registered person is subject to GST under Forward Charge Mechanism (FCM) or Reverse Charge Mechanism (RCM)?
The Applicant has stated that it has got manufacturing unit at Therubali and at Choudwar and captive mines located at Sukinda, Odisha. The Applicant has further stated that it has taken on rent certain premises at New Delhi and Jajpur in Odisha for use as guest house. The guest houses are used to provide food and accommodation for the employees of the Applicant who visit New Delhi/Jajpur for official purposes. As stated, one of the apartments is taken on tent from a registered person where the other is taken from unregistered person. In both the cases, the houses taken on rent for guest house purpose are located in residential area.
In the instant case, the Applicant has stated that it has taken on rent certain premises at New Delhi and Jajpur in Odisha, for use as guest house. The guest house is used to provide food and accommodation for the employees of the company. From the written submission made, contentions advanced by the representatives of the Applicant company and rent agreement copies furnished, the nature of rented properties under discussion clearly appear to be residential properties used for commercial purpose.
Thus, it may be concluded that irrespective of the purpose of use, if the residential dwelling is rented to a registered person under GST, the tenant has to discharge the GST liability under RCM as per Notification No. 05/2022 Central Tax (Rate) dated 13th July 2022
Held that— the Applicant (registered person) has received the service by way of taking residential premises on rent for use as its guest house, it is observed that the said service received by the Applicant (registered person) is subject to GST under Reverse Charge Mechanism in view of the Notification No. 05/2022-Central Tax (Rate) dated 13th July, 2022.