CBIC issues Clarification on Regularizing payment of GST on Reverse Charge (RCM) basis on Renting of Commercial Property under Composition Levy [Read Circular]

The clarification was on regularising payment of GST on Reverse Charge (RCM) basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person under composition levy

29 Jan 2025 11:52 AM IST

The Central Board of Indirect Taxes & Customs ( CBIC ), through the Circular No. 245/02/2025-GST issues clarification on regularizing payment of gst on reverse charge ( RCM ) basis on renting of commercial property under composition levy. It was clarified that payment of GST on Reverse Charge ( RCM ) basis on renting of immovable property other than residential...

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It was clarified that payment of GST on Reverse Charge ( RCM ) basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person under composition levy is hereby regularized for the period from 10.10.2024 to 15.01.2025 on ‘as is where is’ basis.

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Based on the recommendations of the 54th GST council held on 09.09.2024, renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person was brought under reverse charge basis.

The said recommendation was notified vide notification No.09/2024-CTR dated 08.10.2024 effective from 10.10.2024 by inserting an entry at Sr. No. 5AB of the notification No. 13/2017-CTR dated 28.06.2017 thereby prescribing payment of GST on reverse charge basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person.

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Various representations from different sectors were received requesting to bring the service of renting of commercial property by unregistered person to registered person under Forward Charge basis.

55th GST Council in its meeting held on 21.12.2024 recommended that taxpayers registered under composition levy may be excluded from the entry at Sr. No. 5AB of the notification No. 13/2017-CT(Rate) dated 28.06.2017. The same has been notified vide notification No. 07/2025CT(Rate) dated 16.01.2025.

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The Council further recommended that payment of GST on reverse charge basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to a registered person for taxpayers registered under composition levy may be regularized on ‘as is where is’ basis for the intervening period (i.e., date of effect of notification No. 09/2024-CTR dated 08.10.2024 to date of issuance of amending notification No. 07/2025-CT(Rate) dated 16.01.2025).

To Read the full text of the Circular CLICK HERE

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Yogitha S. Yogesh

Yogitha S Yogesh is graduated from Government Law College Thiruvananthapuram on BA. LLB and is currently pursuing LLM in Constitutional Law. She is working as a content writer who is passionate in Content creation. Her area of interest are Constitutional law and Co-operate Law. She is also into teaching, baking, reading and gardening.

55th GST Council MeetingCBICReverse Charge Mechanism

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