GST on Commercial Rent in Kolkata: Reverse Charge When the Landlord Is Unregistered, Residential Rent and Exemptions
Rent for commercial property — shops, offices, godowns, warehouses — attracts 18% GST. A registered landlord charges it on the invoice. Since 10 October 2024, if the landlord is not registered and the tenant is registered for GST, the tenant must pay the 18% GST under reverse charge. From 16 January 2025, tenants registered under the composition scheme were excluded from this reverse charge. Renting a residential flat for use as a residence is exempt, but a registered business renting a residential flat also pays GST under reverse charge, unless it is a proprietor renting in his own name for his personal residence. For Kolkata businesses renting from individual landlords, this is a common compliance gap.
Who pays GST on rent
| Property and parties | GST |
|---|---|
| Commercial property; landlord registered | Landlord charges 18% |
| Commercial property; landlord unregistered; tenant registered (normal scheme) | Tenant pays 18% under reverse charge |
| Commercial property; landlord unregistered; tenant under composition | No reverse charge (from 16 January 2025) |
| Commercial property; tenant unregistered | No GST if the landlord is unregistered |
| Residential flat rented for residence to an unregistered person | Exempt |
| Residential flat rented to a registered person | Tenant pays 18% under reverse charge, unless a proprietor rents it for personal residence in his own name |
How the tenant pays reverse charge
- Issue a self-invoice for the rent, since the landlord does not issue a tax invoice.
- Pay the GST in cash through GSTR-3B; reverse charge cannot be paid from input tax credit.
- Claim input tax credit of the same amount in the same return, if the premises are used for business.
- Report the reverse charge purchase correctly in your returns.
The net cash cost is usually zero for a normal taxpayer, but the payment and self-invoice are mandatory. Missing them leads to demands with interest and penalties in audits.
Landlords: when to register
An individual landlord with commercial rent above ₹20 lakh a year must register and charge GST. Below that, if all tenants are registered businesses, the tenants pay under reverse charge. Landlords who register voluntarily can charge GST and claim credit on repairs and construction services.
Residential rent
Renting a residential dwelling for residence is exempt when the tenant is not registered. When a registered business takes a flat as a guest house or staff accommodation, the business pays GST under reverse charge. A proprietor renting a flat for his own home in his own name is excluded.
TDS on rent
Separately, businesses and individuals above the limits must deduct TDS on rent paid to residents above the thresholds, and on rent to non-resident landlords at higher rates. See our guide to NRI rental income in Kolkata.
FAQs
Is GST charged on shop rent in Kolkata?
Yes, at 18%. The landlord charges it if registered; otherwise a registered tenant pays under reverse charge.
Does a composition dealer pay reverse charge on rent?
No, from 16 January 2025 composition taxpayers are excluded from reverse charge on rent from unregistered landlords.
Is GST payable on house rent?
Not when a residential flat is let for residence to an unregistered person.
TAXAJ reviews rent arrangements, reverse charge compliance and GST returns for businesses in Kolkata. See our GST return filing service or talk to our Kolkata team.
Last updated 11 November 2026. Sources: Notification 13/2017-Central Tax (Rate) as amended by Notification 9/2024-Central Tax (Rate) (from 10 October 2024) and Notification 7/2025-Central Tax (Rate) (from 16 January 2025); Notification 12/2017-Central Tax (Rate), entry on residential dwellings; CGST Act, 2017, section 9(3). General information only.
