The rent hsn code for a shop, office, godown or other commercial property is SAC 997212, and GST on that rent is 18%. Renting a house to someone who lives in it is exempt, but when the tenant is a registered business, the tenant pays 18% under reverse charge.
Since late changes in the rules, many tenants of commercial property must also pay the tax themselves when the landlord is not registered. This page explains each case, the codes, an invoice line and how credit works. For buying a flat rather than renting, see GST on flat purchase.
Rent: codes and GST rates
Item / SAC / GST- Rent of shop, office, showroom or godown18%SAC 997212
- Commercial rent from an unregistered landlord to a registered tenant18%Tenant pays under reverse charge
- Residential house let to a person for livingExemptSAC 997211
- Residential house let to a registered person18%Tenant pays under reverse charge, with an exception
- Rent of hall, marriage venue or event space18%Short term letting of non-residential space
- Rent of vacant land for business18%Except some farm land uses
- Hiring machinery or equipment without operatorAs the goodsSAC 9973
Quick facts
SAC heading
9972: real estate servicesCommercial rent
997212 at 18% (9% CGST + 9% SGST)Residential rent
997211, exempt when used as a residenceReverse charge
Unregistered landlord to registered tenant (commercial), and home let to registered personRegistration limit for landlords
Rs 20 lakh of aggregate turnover in most statesCommon wrong code
9954 (that is construction, not rent)
Rent hsn code and gst rate by property
| Property and tenant | SAC | GST and who pays |
|---|---|---|
| Shop or office, registered landlord | 997212 | 18%, landlord charges it |
| Shop or office, unregistered landlord, registered tenant | 997212 | 18%, tenant pays under RCM |
| Shop or office, unregistered tenant | 997212 | 18% if landlord is registered |
| House to a family for living | 997211 | Exempt |
| House to a registered person | 997211 | 18%, tenant pays under RCM |
| House to a proprietor for own residence, in personal capacity | 997211 | Exempt |
| Paying guest or hostel up to the exempt limit | 997211 | See the hostel entries |
GST on rent of commercial property
A landlord who rents out commercial property must register once aggregate turnover crosses Rs 20 lakh (Rs 10 lakh in special category states). After that, every rent bill carries 18%, split as 9% CGST and 9% SGST because tax follows the location of the premises. Maintenance charges, parking and electricity recovered as part of the rent are usually part of the same supply.
Rcm on rent under gst
Two cases move the tax to the tenant:
- Commercial property from an unregistered landlord: a registered tenant pays 18% under reverse charge. A tenant in the composition scheme is excluded from this rule.
- Residential property to a registered person: the registered tenant pays 18% under reverse charge. There is an exception when a proprietor rents a home in a personal capacity for their own residence.
The tenant pays the reverse charge tax in cash and can take credit of the same amount in the same month, if the premises are used for taxable business.
Gst on house rent and residential property
Renting a house, flat or room to a family or individual who lives there is exempt. The landlord does not charge GST, no matter how high the rent is. The tax only arises when the tenant is a registered person, such as a company taking a flat for its director, and then the company pays it under reverse charge.
Sample rent invoice
Sample line: Rent of shop no. 12 for the month, SAC 997212, taxable value Rs 40,000. CGST 9% Rs 3,600. SGST 9% Rs 3,600. Total Rs 47,200.
Under reverse charge the landlord's bill shows no tax, and the tenant issues a self invoice and pays 18%. Income tax TDS on rent is separate from GST; see TDS on GST for how TDS works under GST itself.
Rent sac code mix-ups
- Renting a JCB, crane or generator without an operator is SAC 9973, at the rate of the goods.
- Renting a truck or car with driver is SAC 9966; see transport charges.
- Construction or repair of the building is SAC 9954, not rent.
- Hotel rooms are accommodation services under 9963, covered on the hotel rooms page.
The rent rules above are a general summary. Lease terms, how the premises are used and who is registered all change the result, and the rules have been revised more than once, so read the present notification and have a GST practitioner or chartered accountant review your lease.
Frequently asked questions
What is the hsn code for rent?
Commercial rent is SAC 997212 and residential rent 997211. Both sit under heading 9972, real estate services.
What is the GST rate on rent of commercial property?
18%. The landlord charges it if registered; if the landlord is unregistered and the tenant is registered, the tenant pays it under reverse charge.
Is GST charged on house rent?
No, renting a home to someone who lives there is exempt. If the tenant is a registered business, it pays 18% under reverse charge.
Can I take ITC on GST paid on shop rent?
Yes, a registered tenant using the shop for taxable business can take credit of the GST on rent, including tax paid under reverse charge.
What is 997212 hsn code?
It is the SAC code for rental or leasing of non-residential property such as shops, offices and godowns, taxed at 18%.