GST Update

Desk of CA. Praveen Sharma – 872 Series (CAPS)

RCM on Rent — one of the most frequently ignored GST compliances for businesses.

Many MSMEs, startups, and even established companies miss reporting Reverse Charge Mechanism (RCM) on rent paid to an unregistered landlord. As per Section 9(3)/9(4) of the CGST Act, when rent is paid to an unregistered person, the tenant must pay GST under RCM.

If RCM is missed, it often leads to GST demand, interest liability, ITC disputes, and objections during audits.

The process is simple: pay GST @18% under RCM, claim eligible ITC, and report it properly in GSTR-3B and GSTR-1. It involves no extra cost—only proper compliance.

If you are paying rent for an office, shop, or warehouse to an unregistered owner, this provision applies to you.

LINK:CA. Praveen Sharma on Linkedin

Regards

CAPS