CBIC: GST is not payable on a house rented to a proprietor for residential purposes.

NEW DELHI: The CBIC has stated that from January 1, no GST will be payable on housing units rented to the owner of a proprietary concern for residential use only.

The Central Board of Indirect Taxes and Customs (CBIC) also notified changes to GST rates for certain goods and services, effective January 1, 2023, based on the GST Council’s recommendations at its meeting on December 17.

From January 1, ethanol alcohol supplied to refineries for blending with motor spirit (petrol) will be subject to a 5% GST, down from the current 18%. In addition, the tax on pulse husks has been reduced from 5% to 0%.

The notification also specifies a 12% GST on ‘fruit pulp or fruit juice-based drinks’ (other than carbonated beverages).

The CBIC has also announced that beginning January 1, 2023, no GST will be levied on residential accommodation rented to a proprietor of a registered proprietary concern if such accommodation is rented in his individual capacity for personal use only.

However, if such accommodation is used for his proprietary business, the proprietor must pay GST on a reverse charge mechanism (RCM) basis at 18%.

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