GST on Commercial Rentals under RCM is to Prevent Revenue Leakage,
The GST ( Goods and Services Tax ) on the commercial rentals under the Reverse Charge Mechanism ( RCM ) was introduced to prevent the revenue leakages, clarified the Minister of State ( MoS) for Finance Pankaj Choudhary to Kerala Lok Sabha Member Kodikunnil Suresh.
The Kerala MP requested the finance ministry to withdraw the GST imposition on the rent for the commercial rentals especially for small traders. To this request, the Cabinet minister has clarified that
“In this regard, I would like to inform you that renting of commercial property by unregistered person to a registered person was brought under Reverse Charge Mechanism (RCM) with effect from 10.10.2024 on recommendations of the 54th GST Council to prevent revenue leakage.”
Mr. Pankaj Choudhary also clarified that the changes in the GST rates and the exemption are made on the recommendation of the GST council. However, it was conveyed that the request to withdraw the imposition will be placed before the GST council after the examination.
