GST on commercial rent for an NRI landlord

The first thing to be clear on is that GST is not the income tax you already deal with; it is a separate tax on the supply of renting, with its own registration and returns. And it does not touch ordinary residential rent, letting a home for someone to live in is generally exempt from GST. It is commercial property, a shop, office, warehouse or other business premises, where GST applies, at 18% on the rent.

Because the property sits in India, the rent is an Indian supply and within Indian GST wherever you as the landlord live, so being an NRI does not put you outside it. What being an NRI does complicate is who registers and pays, and here a recent change is genuinely helpful.

Until recently, an NRI landlord of commercial property faced a difficult registration question. From October 2024, the rules shifted the burden in a common case: where an unregistered landlord lets commercial property to a GST-registered tenant, the tenant must pay the 18% GST under reverse charge, accounting for it themselves. So if you as an NRI landlord are not registered and your tenant is a registered business, the tenant handles the GST, and you often do not need to register for GST at all.

That resolves what used to be a real headache, because whether a non-resident landlord even can or must register was itself contested. Where the reverse charge does not apply, for instance a tenant who is not registered, the position needs checking, and registration through a representative in India may be required if your rental turnover is significant. The key practical point is that GST runs entirely separately from the income-tax side: the same tenant may deduct income-tax TDS under Section 195 on the rent and also account for 18% GST, two different taxes to two different systems. A practising CA works out your GST position, uses the reverse-charge rule where it applies so you need not register, and keeps it aligned with the income-tax TDS.