Mangla Electronics, registered in Ahmedabad, Gujarat under GST, deals in electronic items like TV, cooler, mobile phones etc. Due to the festival…

CA Intermediate · Taxation · MTP · May 2026
Mangla Electronics, registered in Ahmedabad, Gujarat under GST, deals in electronic items like TV, cooler, mobile phones etc. Due to the festival season, Mangla Electronics took a godown for a period of 6 months near its shop on rent from Mr. Moti (unregistered person) for storing electronic items. The rent amounted to 15,000 per month. What should be the GST treatment for rented godown?
(A) Exempt because rent amount is less than - 20,000 per person per month and taken for minimum continuous period of 90 days.
(B) This transaction will be taxable under reverse charge hence Mangla Electronics need to pay tax under RCM.
(C) Mr. Moti, owner of the godown has to pay GST under forward charge and take registration for the same as he is supplying renting services.
(D) This transaction will be exempt from GST because it falls under the forward charge mechanism and the supplier (Mr. Moti) is an unregistered person.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

This transaction will be taxable under reverse charge hence Mangla Electronics need to pay tax under RCM.

Topics: Paper 3B: Goods and Services Tax

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