New Delhi: The government said on Friday that residential units will not be subject to GST if they are rented to individuals for personal use.

The Goods and Services Tax (GST), which is imposed at a rate of 18% on rent paid by tenants, was disputed by the government. The administration said in a tweet that GST will only be charged when a residential unit is rented to a corporate organisation.

“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,” it said.

Abhishek Jain, Partner Indirect Tax at KPMG in India, claimed that the clarification offers relief to GST-registered proprietors or partners in GST-registered enterprises that lease real estate for their own use, such as renting a home for a family.