Notification No.09/2024 – Central Tax (Rate)

Impacts of RCM on Renting of any property other than residential dwelling

If the tenant is Unregistered and the owner is also Unregistered under GST then GST is not applicable (Neither RCM nor FCM)

If the tenant is Unregistered and the owner is Registered under GST then GST is applicable on FCM basis

If the tenant is Registered and the owner is also Registered under GST then GST is applicable on FCM basis

If the tenant is Registered and the owner is Unregistered under GST then GST is applicable on RCM basis

If the tenant is Registered under GST as Composition tax payer then RCM liability will become an extra expense for him because he is not eligible for ITC
@cbic_india kindly exempt such tax payers

If the tenant is Registered under GST as Regular tax payer then he is eligible to claim RCM liability as ITC
@cbic_india majority of owner were unregistered under GST, due to this notification all of them have to discharge their RCM liability through cash because RCM liability compulsorily required to be paid through cash only

Applicable from 10th October 2024 onwards

RCM on Commercial Rent has biggest impact

In short for registered tax payers, rent on commercial property is always taxable, either under RCM or FCM as the case may be