While reports on Friday morning claimed that Indians will need to pay 18% goods and service tax (GST) for rented accommodation, it has since been quashed by the centre. The fact-checking arm of the Press Information Bureau (PIB) has since tweeted calling the reports ‘misleading’.

The PIB posted an explanation of the provisions of the GST, which will be applicable for properties that have been rented.

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“Renting of residential unit taxable only when it is rented to business entity. No GST when it is rented to private person for personal use. No GST even if proprietor or partner of firm rents residence for personal use,” the tweet read.

The Mint had reported earlier that registered tenants will have to shell out 18% GST on the amount of their rent. This regulation, which came into force in mid-July, followed the recommendations of the GST Council meet. The tenants will pay the GST under the reverse charge mechanism.

The PIB also added that the GST is not applicable when the property is rented to a private tenant intended for personal use. The tenants also do not need to pay GST if the proprietor or partner of the firm is renting the residence for personal use.

A salaried person who is renting a house, will not need to pay GST on the rent. However, if a GST-registered person rents or leases a house and uses it for business purposes, will need to pay 18% GST on the amount of total rent paid.

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But if both the tenant and the landlord are not GST registered, the rules will not apply to the former.

After the PIB’s tweet, an expert from KPMG in India Partner Indirect Tax said that the much-needed explanation has given relief to proprietors and firms who are GST registered, PTI reported.

GST registration is mandatory for any person who carries on business or profession, whose annual turnover is more than the limit set by GST law.