Does GST Apply to Rent?
The short answer: It depends on the type of property and the total rental income.
Renting out residential property for use as a residence is completely exempt from GST. However, renting out real estate for commercial purposes is considered a "supply of service" and attracts GST.
When do you need to charge GST?
If your total annual turnover (including rental income and any other business income) exceeds the threshold limit—typically ₹20 Lakhs in most states—you must register for GST and charge it on commercial rent.
The GST Rate
The standard GST rate on commercial rental income is 18%. This is typically split into 9% CGST and 9% SGST for intra-state rentals, or 18% IGST for inter-state rentals.
Renting Residential to Commercial
If you rent a residential property to a GST-registered business (even if they use it as a guest house), it is subject to GST under the Reverse Charge Mechanism (RCM). The tenant is responsible for paying the GST directly to the government.