GST on commercial rent, explained for landlords

The short answer

• Renting commercial property attracts 18% GST (9% CGST + 9% SGST; services accounting code SAC 997212). The September 2025 rate rationalisation did not change this rate.
• A registered landlord charges it on the rent invoice and pays it to the government.
• If the landlord is not registered and the tenant is a regular GST-registered business, the tenant pays it under reverse charge (from 10 October 2024).
• Residential property let as a home is exempt — unless the tenant is GST-registered, in which case the tenant pays 18% under reverse charge.

Who pays GST on rent — every case

When does a landlord have to register?

When your aggregate turnover — all taxable, exempt and export supplies under your PAN, across India — crosses ₹20 lakh in a financial year (₹10 lakh in the special category states). Exempt residential rent counts towards that turnover even though no GST is charged on it. Once registered, GST applies to your commercial rent from the first rupee, not just the part above ₹20 lakh.

Registration is state-wise: the place of supply for renting immovable property is where the property is, so a landlord with properties in two states needs a registration in each.

What counts as the rent

• GST is charged on the rent plus amounts the tenant pays you under the lease — maintenance, common-area charges, property tax you recover from them.
• A refundable security deposit is not consideration, so no GST — until any part of it is adjusted against rent or damages.
• Electricity and water recovered at actual cost as a pure agent may fall outside the value; get this right with your CA.

What a GST rent invoice must show

• Your name, address and GSTIN
• A consecutive invoice number (unique for the financial year) and date
• Tenant’s name, address and GSTIN, if registered
• Description and SAC code 997212
• Taxable value — the rent for the period
• CGST and SGST rate and amount (IGST only in rare inter-state cases)
• Place of supply — the state where the property is
• Whether tax is payable on reverse charge
• Your signature or digital signature

Rent is a continuous supply, so raise the invoice on or before the date the rent falls due under the lease. Show GST as its own line: a tenant deducting TDS then works it out on the rent alone — see the TDS on rent calculator.

A worked example

A registered landlord lets a shop for ₹1,00,000 a month to a company. The invoice shows rent ₹1,00,000, CGST 9% ₹9,000 and SGST 9% ₹9,000 — total ₹1,18,000. The company deducts TDS at 10% on the rent only (₹10,000) and pays ₹1,08,000. The landlord deposits the ₹18,000 GST with their GST return; the company can usually claim it as input tax credit.

If the shop is owned 60:40 by two co-owners who each hold a GST registration and bill their own share, each raises an invoice for ₹60,000 and ₹40,000 of rent under their own GSTIN. Whether co-owners should instead register jointly depends on how the property is held and let — advance rulings have gone both ways, so settle it with your CA once.