QUESTION

Sir, One person residing at Ahmedabad (in the state of Gujarat) having one property in Mumbai(State of Maharashtra). The said property is given on rent for commercial purpose for which rent income is Rs. 6,00,000/- per annum. He has other redidence rent income of Rs. 15,00,000/- in the state of Gujarat. Except that property, he has no otherfixed establishment in the Mumbai ( state of Maharshtra). Whether he has to apply for registration in the state of Maharashtra in view of section 22(1) of the CGST Act or in the state of Gujarat? and what tax he has to charged for taxable supply i.e. S+C GST or IGST?

ANSWER

Facts of the case: One person residing at Ahmedabad (in the state of Gujarat) having one property in Mumbai(State of Maharashtra) given on rent for commercial purpose for which rent income is Rs. 6,00,000/- per annum. He has other residence rent income of Rs. 15,00,000/- in the state of Gujarat. Whether he has to apply for registration in the state of Maharashtra or in the state of Gujarat?

Law Applicable: SECTION 22 OF CGST ACT
(1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:
Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified.

SECTION 2 OF CGST ACT

(6) 'aggregate turnover' means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;
(71) 'location of the supplier of services' means,'

(a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;
(b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the
location of such fixed establishment;
(c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most
directly concerned with the provisions of the supply; and
(d) in absence of such places, the location of the usual place of residence of the supplier;

Notification No. 12/2017- Central Tax (Rate)

Interpretation: As per section 22 a person becomes liable to get registered once aggregate turnover exceeds 20 lakhs and 'aggregate turnover' means the aggregate value of all taxable supplies, exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

Considering this he has to apply for registration as aggregate turnover exceeds 20 lakhs (15 lakhs + 6 lakhs). The registration is to be taken for the location of the supplier as defined in section 2(71).
From your question it appears that he has no working setup in Gujarat as well as in Mumbai. Thus as per section 2(71), his usual place of residence i.e. residential address (Gujarat) is the location of supplier.

So far as tax to be charged is concerned, Place of supply is required to be determined. In the given case, Place of supply for One property is Mumbai (Maharashtra) and for the second property is Gujarat. So he will charge IGST for Mumbai rent and SGST/CGST for Gujarat rent.

Further Services by way of renting of residential dwelling for use as residence is exempt. Thus the Gujarat rent is exempted by virtue of sno 12 of Notification 12/2017 Central Tax (Rate).

Conclusion: As per section 22 read with section 2(71) he is required to take registration in Gujarat as his usual place of residence is Gujarat and is required to charge IGST for Mumbai rent and SGST/CGST for Gujarat rent. However Gujarat rent is exempted by virtue of sno 12 of Notification 12/2017 Central Tax (Rate) being services by way of renting of residential dwelling for use as residence.