Do you need GST registration for your short-term rental?

Registration is triggered by turnover, not by the number of properties or the platform you use. Here is how the threshold is measured and how it interacts with platforms.

Many owners assume that listing on a large platform automatically makes them a GST taxpayer, or on the contrary that a single flat can never require registration. Neither is quite right. What matters is your aggregate turnover and, for platform bookings, a specific rule under section 9(5) of the CGST Act.

The threshold for service suppliers

According to the Central Board of Indirect Taxes and Customs (CBIC), a supplier of services is exempt from registration and payment of GST while his aggregate turnover stays within:

• ₹20 lakh in most States and Union Territories;
• ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura.

The higher ₹40 lakh limit you may have read about concerns suppliers of goods, not accommodation services.

What "aggregate turnover" counts

Section 2(6) of the CGST Act defines aggregate turnover as the value of all taxable supplies, exempt supplies, exports and inter-State supplies of persons having the same PAN, computed on an all-India basis, excluding the GST itself. Three consequences for owners:

• Two flats in Goa and a room in Bengaluru under the same PAN are added together.
• Other activities under that PAN, such as consulting or trading, count too.
• Exempt supplies are included in the total even though no GST is charged on them.

How platforms fit in

Since 22 August 2017, accommodation sold through an e-commerce operator falls under section 9(5): the operator pays the GST on it, unless the host is liable for registration under section 22(1). So a host comfortably under the threshold who sells through a platform is not left collecting GST alone; the platform handles it. Once the host crosses the threshold, the exception applies and the host must register, charge and pay GST on his stays, platform bookings included.

A simple way to picture it

Think of the threshold as a switch. Below it, platform stays are taxed in the platform's hands and direct stays are generally outside GST. Above it, the host becomes the one who charges GST on every stay, at 5% or 18% depending on the value of each unit per day. The switch is measured across your whole PAN, not property by property.

Practical steps once you approach the limit

• Track gross booking values month by month from every channel, not only net payouts.
• Add any other turnover under your PAN.
• If you are nearing the limit, speak to a chartered accountant early: the law sets time limits for applying once you become liable, and invoicing must change from that date.
• Tell your platforms when your status changes, so that the tax is not paid twice or not at all.

Registration also brings regular returns, invoices in the prescribed form and, in the 18% band, the possibility of claiming credit. In the 5% band, credit is not available. Whether registering is worthwhile before you are obliged to is a question of numbers that your accountant can model with you.

NRI owners

Owners living abroad often hold property through a PAN in India and rely on a local manager. The same turnover rules apply; the practical difficulty is gathering all channel statements in one place. A chartered accountant familiar with non-resident filings is the right person to set this up.