Cramming tax rates under previous regimes in a few tax brackets was not simple. But the Modi government did it under GST and that too in a simplified manner. For simplified communication, the government relied on market forces which include news channels as well as political leaders. But, they have their own obligations. They are busy spreading rumours about the simplest of aspects such as GST on rented houses.
GST Tax on House rent
On 12th August, NDTV profits published a news article with a title intended to pull traffic. The headline was, “GST (Tax) On Rentals? Registered Tenants to Pay 18% Tax On House Rent”. It indicated that tenants across the country would have to pay 18 per cent GST on house rent. At the same time, it did not communicate the category of rentals. The headline has now vanished from the Internet and so it is tough to clarify what they wanted to convey.
But, Saket Gokhale, national spokesperson of Trinamool Congress just took a screengrab of the headline to show the government as anti-poor. Mind you, this is the same party whose member Mahua Moitra hid her Louis Vuitton bag when Parliament started to debate on inflation. Coming back to Gokhale, he wrote a fear-mongering tweet telling nearly 30 crore Indians that their house rent will go up by 18 per cent (GST). Once an RTI activist, Gokhale further wrote, “Amidst a massive price rise, the cruel money-grabbing Modi govt is determined to squeeze every penny out of the pockets of ordinary Indians”
Attention: Your house rent will now go up by 18%.
Why? Because the Modi govt will now be charging GST to tenants on their house rent.
Amidst a massive price rise, the cruel money-grabbing Modi govt is determined to squeeze every penny out of the pockets of ordinary Indians. pic.twitter.com/ugddD9Dwez
— Saket Gokhale (@SaketGokhale) August 12, 2022
PIB clears the air
Soon, the rumour spread like wildfire and the fact-checking arm of PIB had to jump in. PIB came up with the clarification that not a single private tenant living in a residential complex will be subjected to pay increased house rent because of the government (GST). Apparently, the new tax applies to those who are renting space for commercial purposes.
Claim: 18% GST on house rent for tenants #PibFactCheck
▶️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 pic.twitter.com/3ncVSjkKxP— PIB Fact Check (@PIBFactCheck) August 12, 2022
In fact, not every tenant renting a property for business has to pay 18 per cent. If the annual turnover of a service provider is 20 lakhs, only then he will be paying GST. In case of businesses involved in goods supplies, the required turnover is 40 lakhs. Most MSMEs in India do not even cross this bracket and hence, are not subject to 18 per cent GST. Moreover, if a proprietor or partner rents any residential property for personal use, he won’t have to pay GST.
Public figures need to act maturely
This is the whole truth. GST looks complicated, but in reality, it is very easy to understand. Other than trying to understand it, there is an attempt to create an atmosphere of harakiri in the country. A few weeks ago, similar rumours were spread about GST on funeral services. It was based on a naive and biased reading of the GST Act as well as rules and regulations.
Another possibility is that they are doing these misinterpretations deliberately to take advantage of the gullible population. People do not have much time to get into the nitty gritty of these complex-looking acts and rules. They rely on public figures and institutions, but the same are busy peddling lies. The media’s credibility is already in abyss, but people still flock in to watch. Surely, they would not like media (as an institution) to go down.
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