Centre debunks claims of 18% GST on house rent; 'Not applicable to private persons'

The Centre, on Friday, debunked claims that tenants will have to pay 18% Goods and Services Tax (GST) on renting residential property. The Press Information Bureau, on its Fact Check handle on social media, called reports making such claims 'misleading' and clarified on the Centre's tax policy. 

"No GST will be levied when it is rented to a private person for personal use," the PIB informed. "Renting of residential unit is taxable only when it is rented to a business entity," it added. 

Hence, the reports claiming 18% GST on house rent are misleading. There will be no Goods and Service Tax when the property is rented by a private person or working-class person for personal use.

CAG asks CBIC to complete verification of GST transitional credit claims

On Monday, the Comptroller and Auditor General (CAG) recommended that the indirect tax department should complete the verification of transitional credit allowed under the GST mechanism.

During the transition to GST (July 1, 2017), taxpayers were permitted to file Form TRAN-1 and avail tax credit on basis of the closing balance of the credit declared in the last return under the pre-Goods and Services Tax (GST) regime.

In the Compliance Audit Report (CAR) on GST for the year ended March 2021, tabled in Parliament, the CAG informed that audit review revealed significant kinks in the transitional credit claims of taxpayers.

"The rate of recovery of detected irregularities was low. Cross jurisdictional issues and lack of co-ordination in central tax jurisdictions in some zones impeded verification and initiation of recovery actions," the CAG said.

Irregularities noticed were relatively higher in four categories-- ineligible credit of duty paid goods in stock without documents, irregular claim on unavailed credit on capital goods, ineligible credit on inputs or input services in transit, and irregular claim on closing balances.

The audit recommends "ensuring verification of the high-risk claims reflected in Table 7aB of Tran 1 (credit on duty paid stock without invoices) and the cases where the transitional credit claim under Table 5a (closing credit balance of legacy returns) was in excess of the closing balance of legacy return".

(With inputs from PTI)