Municipality collecting rent whether same is liable for GST and if yes which system they have to follows cash or mercantile system

Reply—As per notification no. 03/2018-Central Tax-Rate Dated: 25th January, 2018, provision of reverse charge is applicable where 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, 2017.Recipient is required to pay tax under reverse charge.

As per section 2(69) of CGST Act, the terms local authority includes a “Municipality” as defined in clause (e) of article 243P of the Constitution. if a registered person is availing service by way of renting of immovable property from a local authority, such recipient is required to pay tax under reverse charge.