GOVERNMENT OF KARNATAKA
(DEPARTMENT OF COMMERCIAL TAXES)
ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LOCAL GOODS AND SERVICE TAX OFFICE-260,
GROUND FLOOR, VANIJYA THERIGE BHAVAN, MAIDAN ROAD, MANGALORE-575001.
Phone No: 0824-2427070 Mail ID: [email protected]
No. ACCT/LGSTO-260/RCM-RENT/2024-25 Date: 20.12.2024
ADVISORY
Sub ;- Payment of tax by cash under RCM u/sec 9(3) of KGST/CGST Act 2017
towards receipt of rental services –SAC 9972
Ref :- Notification No 09/2024- Central Tax (Rate) dated 08.10.2024
*****
We would like to bring to your attention an update regarding the recent Notification No 09/2024 -
Central Tax (Rate) dated 08.10.2024, which amends Section 9(3) of the GST Act, effective from
10.10.2024.
With this amendment, any registered person under the GST framework who receives rental
services from an unregistered landlord is now required to pay tax in cash at a rate of 18% under the
Reverse Charge Mechanism (RCM) as per sub-section (3) of Section 9 of the KGST/CGST Act, 2017 .
As a result of this change, it is essential for all the registered persons, whether they are regular or
composite taxpayers, to conduct a thorough verification of their business premises, including the
principal place and any additional places of business. It is imperative to identify if the rental services
are being sourced from a registered taxable person or from an unregistered person (URP) and to ensure
that tax is discharged under RCM as applicable.
Please note that any tax paid on rent for services received from an unregistered landlord in the
course of furtherance of business is eligible to claim Input Tax Credit (ITC) under Section 16 of the
KGST/CGST Act, 2017.
Should you have any questions or require further clarification on this matter, please feel free to
contact our office.
NOTE*
1. Those receiving rental services from registered taxable persons need not take action.
2. Taxable persons including those filing nil turnover, exempt turnover, or composite
taxable persons must pay tax in cash under RCM at 18% on rent paid to URPs.
TIMMAPURA Digitally signed by
TIMMAPURA NINGAPPA
NINGAPPA BHAGYA
Date: 2024.12.20 12:34:10
BHAGYA +05'30'
Assistant Commissioner of Commercial Taxes,
LGSTO-260, Mangalore
