Whether rent attracts GST comes down to two questions: what kind of property is being rented, and who is renting it. Commercial rent is a taxable service at 18%. Residential rent is exempt — until a GST-registered business is the tenant, at which point the tax shifts onto the tenant under reverse charge. This guide walks through every case, the registration threshold, and how rent lands in your returns.

The Four Scenarios

The SAC code for renting immovable property is 997212 (commercial) and the service sits in the 18% slab — use the GST calculator to work out the tax on any rent amount.

Residential Rent: Exempt, With One Big Exception

Renting a residential dwelling for use as a residence to an unregistered individual is exempt. A salaried tenant never pays GST on house rent, and the landlord charges none regardless of how much rent is collected.

The exception: when the tenant is registered under GST — a company taking a flat for an employee, a proprietor renting a house that doubles as a registered place of business — the tenant must pay 18% GST under the reverse charge mechanism. The landlord still issues a plain rent receipt with no tax; the tenant self-invoices, pays the tax in cash through GSTR-3B, and claims ITC where the property is used for business.

Commercial Rent: 18% Once You Cross the Threshold

Rent from shops, offices, godowns, co-working desks and any other commercial letting is a taxable supply at 18%. The landlord must register and charge GST once aggregate taxable turnover crosses ₹20 lakh a year (₹10 lakh in special category states). Below the threshold no GST is charged at all.

• Exempt residential rent does not count toward the ₹20 lakh threshold
• Commercial rent, professional fees and any other taxable income all add up
• Interstate rental of immovable property still takes the property's state — check with the place of supply tool
• Not sure whether you must register? Run the registration checker

ITC on Rent

A registered tenant paying 18% on commercial rent can claim it as input tax credit against output liability, provided the premises are used for business and the normal conditions — a valid invoice, the supplier having filed, the invoice appearing in GSTR-2B — are met. GST paid under reverse charge on residential property taken for business is likewise creditable. Estimate your eligible credit with the ITC calculator.

Reporting Rent in GST Returns

• Landlord: taxable rent invoices go in GSTR-1 (B2B with the tenant's GSTIN, or B2C), and the liability is paid in GSTR-3B Table 3.1(a)
• Tenant under RCM: liability in GSTR-3B Table 3.1(d), paid in cash (RCM cannot be set off against ITC), credit claimed in Table 4
• TDS under income tax (Section 194-I) is separate from GST and applies on the rent excluding GST when GST is shown separately

Filing deadlines for GSTR-1 and GSTR-3B are in the due dates calendar.

Common Mistakes

• A registered business paying residential rent and forgetting the reverse-charge liability entirely
• Counting exempt residential rent toward the ₹20 lakh threshold and registering needlessly
• Setting off RCM liability against ITC instead of paying it in cash
• Charging GST on commercial rent without being registered — tax collected without registration must be paid over with penalty