Liability matrix
| Immovable property type | Property usage | Supplier (owner) | Recipient (tenant) | Tax impact |
|---|---|---|---|---|
| Residential | Residential | RP | URP | Exempt |
| URP | URP | No tax liability | ||
| Personal residence of proprietor | RP | RP | Exempt | |
| URP | RP | Exempt | ||
| Commercial, including as residence of employees | RP | RP | RCM | |
| URP | RP | RCM | ||
| RP | URP | FCM | ||
| URP | URP | No tax liability | ||
| Commercial | - | RP | RP | FCM |
| RP | URP | FCM | ||
| URP | RP | RCM | ||
| URP | URP | No tax liability | ||
| RP: Registered person; URP: Unregistered person; RCM: Tax payable by recipient under reverse charge; FCM: Tax payable by the supplier under forward charge. | ||||
Comments
The following documents may help determine the nature and use of the immovable property: (i) property tax demand notice; (ii) electricity bill; and (iii) agreement between the parties.
Also, the reverse charge liability on commercial property (as laid in the table above) was introduced from 10.10.2024. Hence, registered persons may wonder whether tax is liable to be paid: (i) on the entire rent pertaining to October 2024, paid at the end of that month; or (ii) only for pro-rata rent from 11.10.2024; or (iii) in an event where the rent for October 2024 was paid in advance, viz. before 10.10.2024. In such cases, the time of supply is determined either in accordance with section 14 of the CGST Act, 2017 (ref: https://vsrca.in/gst/time-of-supply-change-in-gst-rate/) or sub-sections (1) and (3) to section 13 ibid.
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