STATE TAX RATE

## Report on Amendment to Delhi Goods and Services Tax Act, 2017 **1. Executive Summary:** This report analyzes a notification issued by the Government of the National Capital Territory of Delhi, dated April 22, 2025, which amends the Government's Notification No. 13/2017 State Tax Rate concerning the Delhi Goods and Services Tax (DGST) Act, 2017. The amendment introduces a new provision regarding the tax treatment of services provided by renting immovable property (excluding residential dwellings) where any unregistered person rents to any registered person. The core purpose is to clarify and potentially expand the scope of GST applicability on rental services. The key finding is the establishment of a specific tax treatment for this previously unaddressed scenario. **2. Introduction:** This report provides an informative overview and analysis of the Notification No. 09/2024-State Tax Rate, dated April 22, 2025, issued by the Government of the National Capital Territory of Delhi. The report aims to elucidate the changes introduced to the existing tax framework related to the Delhi Goods and Services Tax (DGST) Act, 2017, specifically focusing on the rental of immovable property. This analysis is based solely on the information contained within the provided policy text. **3. Policy Overview:** This notification constitutes an amendment to the Government’s Notification No. 13/2017-State Tax Rate. The core objective, inferred from the text, is to clarify and potentially broaden the application of GST on services related to the renting of immovable properties. **4. Background and Rationale:** This amendment likely aims to address a gap or ambiguity in the existing tax regulations concerning the renting of immovable property. Specifically, it seems to clarify the GST implications when an unregistered person provides renting services of non-residential properties to a registered person. This amendment ensures that such transactions are brought under the GST framework, potentially addressing concerns about tax evasion or inconsistencies in tax application. The amendment might be a response to observed practices or legal interpretations that necessitated a more explicit guideline. **5. Key Provisions / Changes:** This notification introduces the following key change to the existing policy framework: * **Specific Part of Original Policy Changed:** The amendment modifies the table within Notification No. 13/2017-State Tax Rate by inserting a new serial number and associated entries after serial number 5AA. * **New Rule/Provision:** The amendment introduces a new category, designated as "5AB," which pertains to "Service by way of renting of any immovable property other than residential dwelling." This service is specifically defined when the service is provided by "Any unregistered person" to "Any registered person." * **Difference/Effect of the Change:** The amendment explicitly brings the renting of non-residential immovable property by an unregistered person to a registered person under the purview of GST. Prior to this amendment, the tax treatment of such transactions may have been unclear or subject to varying interpretations. This change ensures that GST is applicable to these services and creates a clear rule for tax compliance. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders directly affected by this amendment include: * **Unregistered individuals or entities:** Who own and rent out non-residential immovable properties to registered businesses or individuals. They are now subject to specific GST regulations for these transactions. * **Registered businesses or individuals:** Who rent non-residential immovable properties from unregistered individuals or entities. They are now subject to specific GST regulations for these transactions. * **Tax authorities:** Responsible for enforcing and administering the GST regulations related to the rental of immovable properties. **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** The Finance (Expenditure) Department of the Government of the National Capital Territory of Delhi is likely responsible for the implementation and oversight of this amendment. The text mentions the Lieutenant Governor and the Council, suggesting their involvement in the decision-making process. * **Timelines or procedures:** The notification explicitly states that it "shall come into force with effect from the 10th day of October, 2024." This provides a clear timeline for implementation. The text does not specify further procedures. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of this amendment is to: * **Increase GST revenue:** By bringing previously untaxed or ambiguously taxed rental transactions under the GST framework. * **Improve tax compliance:** By providing a clear and specific rule for the application of GST on the renting of non-residential immovable properties. * **Create a level playing field:** By ensuring that all rental transactions of this nature are subject to GST, regardless of the registration status of the property owner. **9. Conclusion:** The amendment to the Delhi Goods and Services Tax Act, 2017, introduced through Notification No. 09/2024-State Tax Rate, represents a significant clarification regarding the tax treatment of rental services for non-residential properties when an unregistered person is renting to a registered person. This amendment aims to broaden the tax base, enhance compliance, and provide clarity to stakeholders in the real estate and service sectors within the National Capital Territory of Delhi. This change is significant for those industry participants involved in such transactions and it is important to be aware of and adhere to these modifications in tax liabilities.

Key Entities Referenced