Press Information Bureau has busted fake claims made by NDTV Profit and Trinamool Congress Party’s spokesperson Saket Gokhale in which they have peddled a lie that tenants will have to pay 18% GST on the rents of their houses. While NDTV Profit has put a misleading headline for a clickbait report, Saket Gokhale went on to use this fake headline to push his agenda ahead.
PIB tweeted, “Claim: 18% GST on house rent for tenants. PIB Fact Check: Renting of residential unit taxable only when it is rented to a business entity. No GST when it is rented to a private person for personal use. No GST even if proprietor or partner of firm rents residence for personal use.”
Claim: 18% GST on house rent for tenants #PibFactCheck
— PIB Fact Check (@PIBFactCheck) August 12, 2022
▶️Renting of residential unit taxable only when it is rented to business entity
▶️No GST when it is rented to private person for personal use
▶️No GST even if proprietor or partner of firm rents residence for personal use pic.twitter.com/3ncVSjkKxP
Saket Gokhale peddled sheer lies on the basis of the NDTV news headline. He tweeted, “Attention: Your house rent will now go up by 18%. Why? Because the Modi govt will now be charging GST to tenants on their house rent. Amidst a massive price rise, the cruel money-grabbing Modi govt is determined to squeeze every penny out of the pockets of ordinary Indians.”
NDTV Profit wrote in its headline, “GST (Tax) On Rentals? Registered Tenants To Pay 18% Tax On House Rent”. It did not specify in the headline which tenant is liable to pay the GST on rents. In the body of the news article, it has explained that it does not apply to a common man renting a property for his personal use. NDTV Profit quoted Archit Gupta, founder, and CEO at ClearTax who said while explaining this new rule, “If any common salaried person has taken a residential house or flat on rent or lease, they do not have to pay GST. However, a GST-registered person who carries out business or profession must incur 18 percent GST on such rent paid to the owner”
What is the provision according to new regulations?
Individuals and corporate entities are both considered registered individuals under the GST act. When a person’s yearly turnover exceeds the threshold level, he or she is required to register for GST. The GST limit varies depending on the nature and location of the supply. In a fiscal year, the threshold limit for a registered person offering services alone is 20 lakh. The threshold for a sole provider of goods is 40 lakh. The threshold limit is 10 lakh per financial year if the registered entity is located in any of the northeastern states or special category states.
The new regulations, which went into effect following the GST Council’s 47th meeting, would affect businesses and professionals that have rented or leased residential properties. The rent paid by businesses for residential assets held on rent to be utilized as guest quarters or housing for staff will now be subject to 18% GST. This will raise employee costs for employers who provide free housing to their staff.
