Notification No. 03/2018 – Central Tax (Rate) Explained

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Notification No. 03/2018 - Central Tax (Rate): Seeks to amend notification No. 13/2017- Central Tax (Rate) so as to specify services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a registered person under CGST Act, 2017 to be taxed under Reverse Charge Mechanism (RCM).

GST: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GSR......(E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.13/2017- Central Tax (Rate), dated the 28^thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 692(E), dated the 28^thJune, 2017, namely:-

In the said notification,-

in the Table, after serial number 5 and the entries relating thereto, the following serial number and the entries relating thereto shall be inserted, namely: -

(1)	(2)	(3)	(4)
“5A	Services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a person registered under the Central Goods and Services Tax Act, 2017 (12 of 2017).	Central Government, State Government, Union territory or local authority	Any person registered under the Central Goods and Services Tax Act, 2017.”;

in the Explanation, after clause (e), the following clause shall be inserted, namely: -

‘(f) “insurance agent” shall have the same meaning as assigned to it in clause (10) of section 2 of the Insurance Act, 1938 (4 of 1938).’.

(Ruchi Bisht)
Under Secretary to the
Government of India

Note: -The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 13/2017 - Central Tax (Rate), dated the 28^th June, 2017, vide number G.S.R. 692 (E), dated the 28^thJune, 2017 and was last amended by notification No. 33/2017 - Central Tax (Rate), dated the 13^th October, 2017 vide number G.S.R. 1275 (E), dated the 13^th October, 2017.

📚 Frequently Asked Questions (FAQs): Notification No. 03/2018 – Central Tax (Rate)

Q1: What is Notification No. 03/2018 – Central Tax (Rate)?

Answer:
It is a GST notification bringing renting of immovable property by Government to registered persons under RCM 3.

Q2: Under which section was it issued?

Answer:
Section 9(3) of CGST Act 3.

Q3: Who pays GST under this notification?

Answer:
The registered recipient (tenant) pays GST under RCM 3.

Q4: Does this apply to unregistered tenants?

Answer:
No. Only applies when recipient is registered under GST.

Q5: What type of property is covered?

Answer:
Immovable property (land, buildings, commercial premises).

Q6: What is the GST rate on such renting?

Answer:
18% GST (standard rate for renting of immovable property).

Q7: How to report RCM in GST return?

Answer:
Declare in GSTR-3B under 3.1(d)
Claim ITC in 4(A)(3)
File easily here:
👉 https://finodha.in/gst-return-filing/

Q8: Can ITC be claimed on RCM paid?

Answer:
Yes, subject to Section 16 conditions.
Need GST compliance help?
👉 https://finodha.in/gst-compliance/

Q9: Does this apply to residential property?

Answer:
If rented for commercial use to registered person, RCM applies.

Q10: What if tenant forgets to pay RCM?

Answer:
Interest under Section 50 and penalty under Section 122 may apply.

Q11: Does this affect government departments?

Answer:
Yes, they no longer collect GST in such cases; recipient pays.

Q12: Is TDS applicable?

Answer:
Separate TDS provisions under Section 51 may apply if conditions met.

Q13: Why was this notification introduced?

Answer:
To simplify tax collection and avoid compliance burden on Government bodies.

Q14: What documents should be maintained?

Answer:
✔ Lease agreement
✔ Rent invoice
✔ RCM tax payment proof

Q15: Does this affect business registration?

Answer:
If you are taking property on rent from Government and are registered, RCM applies.
Apply for GST Registration:
👉 https://finodha.in/online-gst-registration/