GST applicable on rent from godown

SC Vasudeva

Q. Please clarify whether GST is applicable on the rent being paid by the Centre/state procuring agencies for storing foodgrain in the rural godowns constructed under Grameen Bhandran Yojana of the Centre or Nabard? — Harpreet Singh

A. GST is payable on the rent received from letting out the building/flat for commercial purposes. On this basis, GST will be payable on rent received in respect of any godown given on hire for storing foodgrain.  The reimbursement of GST by the agency, which has taken the warehouse on hire, will depend upon the terms and conditions of the lease deed. This aspect has also been clarified by Gujarat Authority for Advance Ruling in its judgment dated 20th March, 2018 in the case of Rishi Shipping. 

Q. I am 85 years old and a retired Central government official.  Now, I am a widower, having undergone heart surgery twice, a cancer patient, almost deaf, immobile and unconversant with internet and all so called gadgets and modern day appliances. I don’t have a mobile phone nor can I use it being practically deaf.

I shall be grateful for your advice regarding my income-tax liability for the financial year 2017-18 (assessment year 2018-19) and for filing income-tax return.  The details of my total income for the year 2017-18 are as follows:

Pension: Rs 9,21,337, including component of Rs 5,22,874 as arrears of pension relating to year 1998-2016 granted by the Supreme Court.

Interest income from Senior Citizens Savings Scheme 2004: Rs 1,40,576

Interest on FDs in bank (SBI): Rs 96,378

Rental income from a flat: Rs 97,770

Spent on repair of the flat in 2017-18: Rs 22,000

Total: Rs 12,56,061

During the financial year 2017-18, I have deposited Rs 1,50,000 in SBI for 5 years under Section 80C. Donated Rs 30,000 to Shri Sathya Sai Central Trust under Section 80G.  Also donated Rs 10,000 to Shri Sai Baba Sansthan Trust, Shirdi. The SBI deducted Rs 49,380 as TDS while crediting my pension arrears in September 2017. Entry in bank pass book and Form 16 certifies it.  Please calculate my tax liability.

— LD Joshi

A. You are required to pay a net tax of Rs 71,150 after adjustment of TDS amounting to Rs 49,380. Your total income for assessment year 2018-19 after allowing deduction under Section 80C and under Section 80G of the Income-tax Act 1961 (The Act) works out at Rs 10,56,730. You have not specified any amount which you might have paid for the medical insurance. You have also not stated in the query whether you are entitled to claim any deduction for your disability. No deduction in respect thereof has been considered while computing the aforesaid total income. You can seek relief under Section 89 of the Act in respect of the arrears of pension received during the year. The same has not been considered while making the above calculations.

The rental income has been computed without considering the house tax, if any, paid by you as the figure thereof has not been specified in your query. However, statutory deduction @30% for repairs has been taken into account.

Q. My friend had a residential plot.  The sale deed is in the name of his wife (first) and in his name (second). They have taken a home loan from a bank. The wife of my friend is a government employee and is filing I-T return regularly. Their son is guarantor to the home loan.

They have constructed the house and now their son along with his family is residing in one portion of the house with them.  Their son is working in a reputed organisation and is filing I-T return regularly.

Please advise whether his wife can give a house rent receipt to his son stating that she has received payment from her son to enable him to take I-T rebate?

— Ramesh Kumar

A. The wife of your friend can issue a receipt for the house rent received from her son for the portion of the house occupied by him.  However, the amount of rent so received shall have to be reflected as an income in her tax return.

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