The government on Friday said GST will not be applicable on residential units if they are rented out to private persons for personal use. The government dismissed media reports which claimed that there is an 18 per cent Goods and Services Tax (GST) on house rent paid by tenants.
In a tweet, the government said GST would be levied only when the residential unit is rented out to a business entity. "No GST when it is rented to private person for personal use. No GST even if proprietor or partner of firm rents residence for personal use," it said.
KPMG in India Partner Indirect Tax Abhishek Jain said the clarification provides relief to GST-registered proprietors or partners in GST-registered firms who take on rent immovable property for their personal use such as renting of a house for family accommodation.