A tenant occupies a commercial property, uses the lifts, security, common areas and other maintenance facilities, and even pays the maintenance charges directly.
So, can the maintenance invoice simply be raised in the tenant’s name so that the tenant can claim Input Tax Credit under GST?
At first glance, the answer may seem obvious.
The tenant uses the services. The tenant bears the cost. The tenant is GST-registered.
But GST law asks a slightly different question:
Who is legally liable to pay for the maintenance service?
That distinction can decide whether the tenant is genuinely the recipient of the service — and whether the Input Tax Credit claimed on such maintenance charges can withstand scrutiny.
A Common Commercial Arrangement
Consider a simple example.
A developer has allotted commercial premises to an individual owner. The owner subsequently leases those premises to a GST-registered company.
Maintenance of the commercial complex — including security, cleaning, common-area upkeep and similar services — is provided by the developer or maintenance agency.
Now suppose the owner is not registered under GST, while the tenant is.
If the developer raises the maintenance invoice in the owner’s name, the GST charged may effectively become a cost because the owner cannot claim ITC.
Naturally, the parties may ask:
Why not let the tenant pay the maintenance directly and have the invoice issued in the tenant’s GSTIN?
Commercially, that appears efficient.
Legally, however, direct payment is only part of the story.
Who Is the “Recipient” Under GST?
The answer begins with Section 2(93) of the CGST Act.
Where consideration is payable for a supply, the law generally treats the person liable to pay that consideration as the recipient.
This is important because the person actually making the payment and the person legally liable to make the payment can be different.
Section 2(31), which defines “consideration”, recognises that payment may come from the recipient or from another person.
That means the mere fact that a tenant pays maintenance charges does not automatically make the tenant the recipient of the maintenance service.
The first question should therefore be:
What do the underlying agreements say?
If the allotment agreement or maintenance agreement makes the property owner liable to the developer for maintenance charges, the owner may continue to be the recipient even if the tenant pays the amount directly on the owner’s behalf.
Paying the Bill Is Not the Same as Receiving the Supply
This is where many commercial arrangements can create GST risk.
Suppose the owner remains contractually liable to pay maintenance charges but the lease deed says that the tenant will directly pay those charges during the tenancy.
That may only change who makes the payment.
It may not change who owes the payment to the developer.
In such a case, the tenant could effectively be discharging the owner’s liability.
The fact that the tenant physically uses the building facilities also does not by itself settle the matter. Usage is relevant commercially, but GST entitlement depends on the underlying supply relationship and statutory conditions.
This distinction becomes particularly important when Input Tax Credit is involved.
Can the Tenant Claim ITC Merely Because the Invoice Bears Its GSTIN?
Not necessarily.
A tax invoice is important evidence for claiming ITC, but an invoice cannot by itself create a supply relationship that does not otherwise exist.
Section 16 of the CGST Act requires the registered person claiming credit to satisfy the prescribed conditions, including receiving the relevant supply.
Therefore, if all the underlying documents show that maintenance services are contractually supplied to the owner, simply replacing the owner’s name with the tenant’s name and GSTIN on the invoice may invite questions.
During scrutiny, the Department may look beyond the invoice and examine:
- the allotment agreement;
- the lease deed;
- the maintenance agreement;
- correspondence between the parties;
- accounting entries; and
- the actual contractual liability for the maintenance charges.
If those documents tell a different story from the invoice, the tenant’s ITC position can become vulnerable.
Can the Arrangement Be Structured Differently?
Yes — but the commercial relationship itself should change, not merely the invoice.
A more defensible structure may involve a genuine tripartite agreement between:
the developer or maintenance agency, the property owner, and the tenant.
Under such an arrangement, the parties may prospectively agree that during the lease period:
the maintenance service will be provided directly to the tenant;
the tenant will itself be liable to the developer for the maintenance consideration; and
the developer will bill the tenant accordingly.
This is materially different from the owner merely telling the developer:
“Please collect the amount from my tenant and put the tenant’s GSTIN on the invoice.”
In the latter case, the owner may still remain the person legally liable for the payment. In the former, the contractual relationship itself is altered so that the tenant assumes direct liability.
The Documents Must Tell the Same Story
A tripartite agreement alone should not be treated as a magic solution.
The allotment terms, lease deed, maintenance arrangement, invoicing practice and accounting records should all be broadly consistent.
For example, if the original allotment agreement states that the owner remains unconditionally liable for maintenance, while a later document says the tenant alone is liable for the same charges, that inconsistency could itself invite scrutiny.
Similarly, if the documents claim that the tenant is the direct recipient but the developer continues maintaining the account in the owner’s name and legally looks to the owner for recovery, the substance of the transaction may not support the invoicing structure.
Under GST, documentation is strongest when it reflects the way the parties actually conduct themselves.
There May Also Be an Impact on the Value of Renting
There is another angle that businesses should not ignore.
Section 15(2)(b) of the CGST Act provides for inclusion in the value of a supply of certain amounts that the supplier is liable to pay but which are incurred by the recipient.
Accordingly, if the landlord is legally responsible for maintenance but the tenant pays that amount on the landlord’s behalf, a separate question may arise about whether such payment should form part of the value of the renting service.
This makes the drafting of the lease important.
The agreement should clearly indicate whether maintenance is:
part of the landlord’s obligation relating to the rented premises; or
a separate service for which the tenant independently contracts and becomes directly liable.
The answer can affect not only ITC, but potentially the GST valuation of the leasing arrangement itself.
Prospective Restructuring Is Safer Than Retrospective Invoice Changes
Where historical documents clearly show the owner as the recipient of the maintenance service, retrospectively changing invoices merely to enable the tenant to claim ITC can be difficult to defend.
A safer approach is generally prospective.
The parties can review the existing lease, allotment and maintenance arrangements and, where commercially and contractually permissible, execute an appropriate amendment or tripartite arrangement from a defined future date.
Invoices, ledgers and payment records can then follow the revised contractual structure consistently.
This also protects the maintenance service provider.
A supplier should ideally have a sound contractual basis before issuing a B2B invoice in a particular GSTIN, rather than doing so merely because one party would prefer to avail ITC.
So, Who Is the Real Recipient?
There is no universal answer based simply on who occupies the property or who makes the payment.
The real question is:
Who is legally liable to the maintenance service provider for the consideration?
If the owner remains liable and the tenant merely pays on the owner’s behalf, the owner may continue to be the recipient.
If the arrangement is genuinely restructured so that the tenant independently becomes liable to the maintenance provider, the tenant has a stronger basis to be treated as the recipient and claim ITC, subject to the other conditions under GST law.
Key Takeaways
For businesses, landlords and tenants dealing with GST on commercial lease maintenance charges, the practical lessons are straightforward:
- Payment alone does not determine the recipient under GST.
- The contractual liability to pay is central to the analysis.
- An invoice bearing the tenant’s GSTIN is not enough if the agreements still identify the owner as the recipient.
- A genuine prospective tripartite arrangement can strengthen direct invoicing to the tenant.
- Lease deeds, maintenance agreements, invoices and accounting records should all tell the same commercial story.
- Maintenance payments may also have implications for valuation of the renting service under GST.
The larger lesson is simple:
GST follows the underlying transaction, not merely the name appearing on the invoice.
For taxpayers looking to preserve Input Tax Credit on maintenance charges for leased premises, getting the contractual structure right is therefore just as important as getting the invoice right.