Assam Amends GST Notification to Introduce Reverse Charge on Commercial Property Renting

The Government of Assam's Finance (Taxation) Department recently issued Notification No. 9/2024-STATE TAX (RATE) on October 17, 2025, which was subsequently published in The Assam Gazette, Extraordinary, on October 24, 2025. This notification, a piece of delegated legislation, introduces significant amendments to the existing Notification No. FTX.56/2017/26, dated June 29, 2017 (Notification No. 13), which pertains to Goods and Services Tax (GST) rates and mechanisms in the state. The amendment was made by the Governor of Assam in exercise of powers conferred by sub-section (3) of section 9 of the Assam Goods and Services Tax Act, 2017 (Assam Act No. XXVIII of 2017), acting upon the recommendations of the Council. The primary change involves the insertion of a new serial number, 5AB, into the Table of the principal notification. This new entry specifies that for "Service by way of renting of any immovable property other than residential dwelling," when provided by "Any unregistered person" to "Any registered person," the recipient (the registered person) shall be liable to pay the tax under a reverse charge mechanism. This legal consequence directly affects unregistered individuals or entities who rent out commercial properties and registered businesses or individuals who lease such properties. Notably, this notification has been deemed to come into force retrospectively from October 10, 2024.

The legislative intent behind this amendment is to streamline tax collection and enhance compliance within the Goods and Services Tax framework, particularly concerning the renting of non-residential immovable property. Prior to this notification, the liability for GST on such services, when provided by an unregistered person, would typically fall under the forward charge mechanism, making the unregistered supplier responsible for tax remittance. This often presented challenges in ensuring comprehensive tax collection, especially from a fragmented base of unregistered lessors. The amendment addresses this statutory gap by shifting the responsibility for tax payment to the registered recipient of the service. This policy rationale aims to leverage the organized nature of registered businesses, making them accountable for remitting the GST on commercial property rentals received from unregistered suppliers. The legislation provided: “Service by way of renting of any immovable property other than residential dwelling. Any unregistered person Any registered person.” This provision effectively introduces a reverse charge mechanism (RCM), where the recipient of the service, rather than the supplier, is obligated to pay the GST to the government. This mechanism is a common enforcement tool in GST laws to ensure tax collection in specific sectors or transactions where collecting tax from the supplier might be administratively difficult or prone to evasion. By amending the existing rate notification, the state government has clarified the tax liability and introduced a new obligation for registered persons who rent commercial properties from unregistered landlords, thereby strengthening the overall tax administration.

Keywords: Assam GST, Goods and Services Tax, Reverse Charge Mechanism, Commercial Property Rent, Immovable Property, Taxation, Notification, State Tax, Finance Department

Geo Tags: India, Assam District: Not Applicable