GST On Residential Dwelling – Opening Yet Another Pandora's Box

Intending to make housing affordable to everyone, the government had earmarked "renting of residential dwelling for use as a residence" as an exempt service under the erstwhile regime. While moving to the GST regime, such service was not taxable until recently. W.e.f., 18^th July 2022, residential dwellings rented or leased out to registered persons, have been brought under the ambit of GST¹.

The authors, through this article, have analyzed the tax position as it existed pre and post amendment, and the impact such amendment would bring to the industry.

Vide the rate Notification 04/2022², exemption on renting of residential dwelling for use as a residence except where it is rented to a registered person has been withdrawn. The corresponding amendment has also been brought vide rate Notification No. 5/2022³, by virtue of which services by way of renting of residential dwelling by any person to a registered person has been made exigible to GST under the reverse