GST for coworking operators in India: a practical guide

What GST rate applies to coworking?

Coworking is treated as renting of non-residential immovable property. The service code is SAC 997212 (rental or leasing services involving own or leased non-residential property), and the rate is 18%. Within one state that is charged as 9% CGST plus 9% SGST; for an inter-state supply it would be 18% IGST.

The GST rate rationalisation that took effect on 22 September 2025 moved many goods into the new 5% and 18% slabs, but it did not change the treatment of commercial renting: it is still 18%.

In practice almost everything a center bills alongside the space (meeting rooms, parking, internet, printing, credits bundled into a membership) is also at 18%, so mixed rates rarely come up. Food and beverages are the usual exception; if your center sells them, check that line with your CA.

Place of supply is your center’s state, not your client’s

Under section 12(3) of the IGST Act, the place of supply for services directly related to immovable property, including granting the right to use it, is the location of the property.

So a center in Chennai billing a client registered in Bengaluru charges Tamil Nadu CGST and SGST, not IGST. Two things follow:

• Your invoices show the center’s state as the place of supply, whatever the client’s address.
• Your clients’ input tax credit: a business can generally only use CGST and SGST of a state where it holds a GST registration. A client registered only in another state may not be able to claim the GST on your invoice. Larger clients know this and sometimes register in your state; expect the question during sales.

Registration: one GSTIN for each state you operate in

• Threshold: service providers must register once aggregate turnover crosses ₹20 lakh (₹10 lakh in special category states). Aggregate turnover is counted across all your states under one PAN. Most operators cross it quickly, and many register earlier because business clients want GST invoices.
• One registration per state: you register in every state where you have a center. Several centers in the same state can sit under one GSTIN as additional places of business.
• Separate invoice series: keep a separate invoice number series for each GSTIN.

Reverse charge on rent from unregistered landlords

Since 10 October 2024 (Notification 09/2024-Central Tax (Rate)), when a registered business rents commercial property from an unregistered landlord, the tenant pays the 18% GST under reverse charge. If you lease a building from an individual owner who isn’t GST-registered, that tenant is you.

• Reverse charge tax has to be paid in cash through the electronic cash ledger, not from your input tax credit balance.
• You can then generally claim it back as input tax credit, if the usual conditions are met. So it is mostly a cash-flow cost, not a permanent one.
• Since 16 January 2025 (Notification 07/2025-Central Tax (Rate)), businesses under the composition scheme are excluded from this reverse charge.

If your landlord is GST-registered, nothing changes: they charge you GST on their invoice as before.

Input tax credit: what you can and can’t claim

Generally claimable, when used for your taxable coworking supplies:

• GST on rent paid to registered landlords, and reverse charge GST you paid in cash
• Maintenance, housekeeping, security, internet, software and utilities billed with GST
• Furniture and other movable equipment

Generally blocked: goods and services used to construct immovable property on your own account, which can include fit-outs that become part of the building (section 17(5) of the CGST Act). This area has been litigated and amended recently, and the amounts are large for a new center, so get advice before committing to a big fit-out.

E-invoicing: the ₹5 crore and ₹10 crore lines

• ₹5 crore: e-invoicing (generating an IRN through the Invoice Registration Portal) is mandatory for B2B invoices once your aggregate turnover has exceeded ₹5 crore in any financial year since 2017-18. This threshold applies from 1 August 2023.
• ₹10 crore: from 1 April 2025, if your annual aggregate turnover is ₹10 crore or more, invoices must be reported to the IRP within 30 days of the invoice date. After that the portal rejects them, so late e-invoicing can’t be fixed later.

Security deposits

A refundable security deposit is generally not treated as payment for the service, so GST is not charged when you collect it. If you adjust the deposit against unpaid fees or forfeit it, GST generally applies to the amount adjusted. Write the treatment into your agreements so it is clear at move-out.

A monthly GST checklist for coworking

1. Every invoice carries your GSTIN for that state, the client’s GSTIN for B2B, SAC 997212, the place of supply (your center’s state), the taxable value, CGST plus SGST, and a number from that GSTIN’s series.
2. E-invoices generated where you are over ₹5 crore, and uploaded within 30 days if you are at ₹10 crore or more.
3. Reverse charge paid in cash on rent to unregistered landlords.
4. Returns filed: GSTR-1 for outward supplies and GSTR-3B for the summary and payment. Businesses with turnover up to ₹5 crore can opt for the quarterly QRMP scheme.
5. Input tax credit reconciled against GSTR-2B before you claim it.

Where software helps

Most GST mistakes in coworking are invoicing mistakes: the wrong place of supply, a missing client GSTIN, or a seat that never got billed. In Managee Space every tenant gets a GST-ready invoice for the center they sit in, built from their seats, parking and credits, with reminders on WhatsApp and email and one view of who has paid across every location.