Direct answers about Goods and Services Tax (GST) formulas, rental tax slabs, and CGST/SGST/IGST splits.
What is the difference between GST Exclusive and GST Inclusive calculations?
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GST Exclusive means the tax amount is added on top of the base cost (Base Amount + GST = Total Gross). GST Inclusive means the entered amount already includes tax, and the base price and tax portion are reverse-calculated (Base Amount = Gross Amount / (1 + GST Rate / 100)).
What GST rate applies to commercial property and equipment rentals in India?
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Commercial property rent and most equipment or asset rentals generally attract an 18% GST rate under service accounting codes (SAC 9972 and SAC 9973). Residential property rented to GST-registered businesses also falls under the 18% reverse charge mechanism (RCM).
How is GST split between CGST, SGST, and IGST?
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For intra-state transactions (within the same state), GST is split equally into 50% CGST (Central GST) and 50% SGST (State GST). For inter-state transactions (between two different states), 100% of the tax is billed as IGST (Integrated GST).
How do you calculate GST amount manually using the formula?
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To add GST (Exclusive): GST Amount = (Base Amount × GST%) / 100. To remove GST (Inclusive): GST Amount = Gross Amount - [Gross Amount / (1 + (GST% / 100))].
Are refundable security deposits subject to GST?
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Pure refundable security deposits are not subject to GST because they represent collateral rather than consideration for a service. However, if a deposit is forfeited, retained for property damage, or adjusted against rent, GST applies to the forfeited amount.
Can rental businesses claim Input Tax Credit (ITC) on GST paid?
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Yes, GST-registered rental businesses can claim Input Tax Credit (ITC) on GST paid for commercial rent, repair costs, maintenance services, and capital asset purchases, provided valid tax invoices are maintained and used for business furtherance.