Defying all the presumptions, residential rental income has been kept out of Goods & Service Tax (GST) ambit. But not if the residential property in Delhi NCR is rented for commercial use for above 20 lacs a year. Below that slab it is exempted from GST.
Financial Services Secretary, Hasmukh Adhia affirmed that rental income over 20 Lacs on residential property rented out for shops or any other commercial venture will be levied under GST.
Many residential property owners now may heave a sigh of relief, as the rental income is exempted from GST, contrary to earlier speculations of 18% tax. This was highlighted by Hasmukh Adhia in the GST Master Class. The property owners who come under this bracket will need to register with GST and pay taxes.
Much before the GST was introduced, the rental income from residential properties in Delhi NCR was brought under service tax ambit. This was withdrawn later after the new tax proposal was reviewed. Now converted to GST, the service tax on rental income from the commercial properties remained in force.
It is also elaborated by GST officials that 69.32 Lac taxpayers registered with service tax, excise, and VAT have now moved over to the GSTN portal. There are still more to follow suit, as earlier in indirect tax ambit there were 80 lacs above taxpayers and assesses.
This was informed by GSTN chief executive Prakash Kumar, that out of those registered on GSTN portal 38.51 lacs have completed all the registration formalities and are issued with the registration certificate. Encouragingly, over 4.5 lacs taxpayers have registered with the GSTN since June 25. Rest of the 30.8 lacs enterprises or individuals, migrated to GSTN portal have not yet completed the process. The SMSs and emails are being sent so the registration process is completed soon.
Adhia further informed that any amendment in online registration can be done by July 17. The registration for GST consultants who practice taxation will begin on the same day. He assured that the formalities are not complicated for the taxpayers who are required to furnish information about business places, the promoters, and type of business etc.