You shall have no liability towards gst notice. You are also not liable to pay the gst amount to the owner unless agreement clearly states that taxes are extra.
GST demands after 2 years
I am a registered GST business and deligently pay GST on amounts that I receive in my service oriented business. I am paying rent and do not deduct TDS since the landlord says he pays on his behalf. Now the landlord received notice to pay GST for amount that he receives from me. He is demanding me the GST amount to be paid since 1st April 2017 else vacate the premise immediately. My business cycles are for whole financial year and I am committed to deliver services (training) till 31st march 2020 to customers. 1. Is the demand from landlord valid legally to charge me GST since there is no mention in rental agreement if the rent amount is including GST or not. If yes, can I claim the GST amount from govt since I am paying GST since April 2017. 2. The contract has a lock in period till 2022, but written just on plane stamp paper, not a registered one. 3. are there any other consequences on me due to his notices? How can I tackle this?
Asked 6 years ago in Business Law
10 Answers
the landlord of the property given on rent needs to collect applicable GST from the tenant or person paying rent. The amount of GST will be levied on the rent charged
2) non registration does not effect validity of agreement
- As per law, the landlord of the property given on rent needs to collect applicable GST from the tenant . The amount of GST will be levied on the rent charged.
- Further, the tenant needs to deduct TDS at 10%, in case the rental amount for the property is more than Rs.1.80 lakh per year.
- Further, a Rent Agreement is a legally binding contract between the tenant and the landlord , and hence both the parties of the agreement are bound by the clauses of the agreement.
1. No, the demand from landlord is not valid legally, because there is no mention in the rental agreement regarding the payment of GST.
- Yes, you can claim
2. As per law, registeration is mandatory, if the lease period is exceeed 12 months.
3. NO, you should to reply the said notice , after narrating that as per agreement , you are not liable to pay the same, and also on this ground he cannot force to vacate the premises.
- You can file a suit for Permanent Injunction , for restraining the landlord to take possession from you.
Good luck and dont forget to rating Positively.
1. Whether there is a demand for GST made in the rental agreement or not, since this attracts GST, you may have to comply with the demand made by the landlord since he is responsible to pay GST to government. In general the supplier of goods or service is liable to pay GST. However in specified cases like imports and other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism. Further, in some cases, the liability to pay is on the third person (say in the case of e-commerce operator responsible for TCS or Government Department responsible for TDS).
As far as your GST payment for other services, you may have to file a return, and see if you can claim the GST paid towards the rent can be included in it to claim any exemption.
2. The unregistered contract may not be enforceable in court of law if there is a dispute on this.
3. Since you have availed the services, you are liable to pay the applicable GST.
1. In the financial interest of your business, it is best to pay GST to landlord AFTER receiving a proper notice for GST from landlord. This is necessary for your tax returns and off-set claims. Pay by proper cheque separately and preserve documents.
2. An unregistered agreement has no legally enforceable value and is null & void for any & all purposes.
3. As far as payment of GST to dept., is concerned, you have no liability. BUT the landlord has is liable for GST penalty etc....
Hi
In general, the service provider(land lord) has to submit invoices(monthly rental plus 18% GST) to you and upon you paying rental plus gst, you are eligible to claim input tax credit in gst paid.
If landlord has not collected gst, then it is his problem to pay gst.
If there is no mention of gst in agreement, then rent is inclusive of GST.
I am afraid you cannot claim input tax credit on past gst even if you pay gst arrears now.
Since it is an unregistered lease deed, the document is not admissible as evidence and in law your rental agreement will be construed as month on month lease agreement only.
Better to sort out the issues with land lord and register the lease agreement in case you have spent substantial monies on interior etc or else vacate the premises in 31 March 2020 after giving notices. Legally you are on a strong wicket as it is the fault of land lord( and additionally land lord is wrongly not permitting you to deduct TDS).
Hope this information is useful
Demand is illegal, GST is inclusive of rent payable. Than LL is liable to GST. From now onwards start deducting GST and than pay.
Tenant cannot be evicted withtou due process of law that also on default committed by tenant. Even if it is not registered, it will take years from court to obtain eviction order.
Just don`t make default in payment.of rent. reply to noitce that lock in is up to 2022 and also mention his illegal demand of GST - cause of reason of notice.
if you are paying the rent needs to deduct TDS at 10%, in case the rental amount for the property is more than Rs.1.80 lakh per year..
Rental income from residential property has been exempt from GST but any earning over Rs 20 lakh annually from renting or leasing for commercial purposes would attract the levy. ... The taxpayer earning more than the exempted threshold will have to register with the GST Network and pay taxes.
If his income from rent is more that 20 lakh per annum then he have to pay GST and he can charge GST from you.
He cannot make you vacate the premises immediately if agreement is upto 2022.
If you are not bound to pay get then no. Otherwise you need to clear the said arrears
