Order date – 23 February 2023

Parties – M/s. Indian Metals and Ferro Alloys

Facts –

• The Applicant, M/s. Indian Metals and Ferro Alloys Limited, has manufacturing units at Therubali and Sukinda in Odisha and has taken on rent certain guest houses and apartments in New Delhi and Jaipur and Odisha for accommodation for its employees who visit these places for official purposes.
• The applicant has drawn attention to Notification No. 05/2022- Central Tax (Rate) dated 13.07.2022, which brought an amendment to Notification No. 13/2017- Central Tax (Rate) dated 28.06.2017 by inserting a serial number which specifies that renting of residential dwelling to a registered person whether used for residential or for any other purpose will fall under Reverse Charge Mechanism (RCM).

Issue –

• Whether ‘residential dwelling’ would attract GST under RCM?

Order –

• The authorities observed that CBIC has clarified that renting of an immovable property/ residential dwelling is considered as supply of service under GST as per Schedule II of the CGST Act, and is taxable @ 18% under the reverse charge mechanism from 18th July 2022 and liability to pay GST @ 18% under the reverse charge mechanism will arise on the recipient (tenant), if he is a registered person under GST with no other condition.
• The nature/purpose of use of residential dwelling by the recipient has not been a condition in the said RCM notification. 
• Hence, service of renting of residential dwelling to a registered person, would attract RCM irrespective of the nature of use.