New GST Rule on Employees House Rent Facilities

18% GST would be levied from 18th July 2022, on the lease rent furnished for the rental residential lodgings to registered individual’s underneath GST. The amendment is on the recommendations of the 47th GST council meeting, conducted on 29th June 2022. For learning the revisions for the common man on the basis of the change, the same would be mandatory to know the GST levy on renting residential lodgings.

GST Legislation Position on Rent-free Houses Before 18th July 2022
For the GST legislation, every supply would be exposed to be taxed unless circulated as exempt. There were exceptions on the services of renting a residential lodging which is being used as a residence, at the start of the GST regime. These kinds of services would get relieved in the pre-GST times also. The word residential lodgings is used as a residence. As per the services of renting of the commercial lodgings or giving the residential lodgings on rent towards the commercial use, liable for the tax before the date 18th July 2022.

The Present Condition of GST on Rent-free Houses
For implementing the suggestion of the GST council, the CBIC acquired two amendments in the GST legislation for the same transaction. One would be restricted to the former exemption to the unregistered recipient. The other is to denote the RCM on the registered recipient. The RCM would be the special case underneath GST in which the recipient would need to directly deposit the tax to the government rather than furnishing the same to the supplier.
As per the GST paid on the renting of the residential lodgings towards the residential utilisation rely on the status of the recipient of these residential lodgings. If the tenant would enrol then he is obligated to file the GST underneath RCM from 18th July 2022 or GST shall get relieved. The same could be functional when the property would be castoff for residential purposes. The recipient could claim ITC of the furnished GST underneath RCM as per the conditions.

GST Impact on Business and Companies Due to Rent-free Houses
The similar would affect companies and trades, that equip the guest houses, rent free accommodation and others to their employees. These businesses would be required to release the GST on the specified services, but they are enabled to avail the ITC of the furnished taxes, as per the conditions.
The same would be gotten subsequently if the ITC on these renting can be refused quoting the same as used for the personal consumption of the employees. The uncertainty in the Input tax credit availability, along with the upfront GST payment underneath RCM might be directed to amend the perquisites to the employees. Thus, the examination of the rental agreements for the residential lodgings might be needed via a legal view to prevent litigations.