Commercial Property Rentals by Unregistered Persons to Registered Person comes under RCM in GST: CBIC notifies

The CBIC has issued Notification No. 09/2024-Central Tax (Rate), effective October 10, 2024, mandating that renting commercial properties by unregistered persons to registered persons will fall under the Reverse Charge Mechanism (RCM). This change aims to address tax evasion and revenue leakage in the commercial real estate sector. Under RCM, the GST liability shifts from the supplier to the recipient. The notification adds a new entry, “5AB,” under which renting any property, excluding residential dwellings, by an unregistered person to a registered person will be subject to RCM. Similar amendments have been made under the IGST and UTGST Acts, ensuring consistent application across states and union territories.