• Notification Date: 02-01-2023
  • Notification No: N/A

CBIC rules GST not applicable on House rented to Proprietor for Residential Purpose

The CBIC has said that GST would not be payable on housing units rented to the proprietor of a proprietary concern for residential usage only. The new ruling is applicable from January 1, 2023. The Central Board of Indirect Taxes and Customs (CBIC) also notified amendments in GST rates effective from January 1, 2023 for some goods and services. The decisions have been made as per the recommendations of the GST Council in its meeting on December 17. 

From January 1, ethyl alcohol supplied to refineries for blending with motor spirit (petrol) will attract 5 percent lower GST than the present 18 percent. Also, tax rate on husks of pulses has been reduced to zero from 5 percent. 
The notification charges 12 percent GST on 'Fruit pulp or fruit juice-based drinks' (other than carbonated beverages). 

The CBIC has also notified that no GST would be charged where the residential accommodation is rented to a proprietor of a registered proprietary concern if such accommodation has been rented in his individual capacity to be used as his residence only. The new rule will be put into effect from January 1, 2023. 
However, the proprietor would be liable to pay GST on reverse charge mechanism (RCM) basis at 18 percent in cases where accommodation is being used for his proprietary concern. 

AMRG & Associates Senior Partner Rajat Mohan said, "This is a fair notification that would maintain a tax-neutral status for renting residential accommodation to proprietors of the proprietary concern for residential use only."