A significant clarification from GST authorities has put property owners and venue providers under the scanner. If you own a space used for shows, exhibitions, or functions, you can now be held responsible for the GST compliance of the event organizers in certain cases.

This move aims to curb tax evasion by transient event organizers who often disappear after an event without paying the required taxes.

Key Requirements for Property Owners

To avoid falling into a "joint liability" trap, venue providers must now exercise due diligence before renting out their premises:

• Verify GSTIN & PAN: Always collect and verify the GST registration and PAN details of the event organizer.

• Prior Intimation: In several jurisdictions, authorities may require the venue owner to intimate the GST department about the upcoming event in advance.

• Documentation: Maintain a proper record of the agreement, payment terms, and tax declarations provided by the organizer.

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Why This Matters

Non-compliance by the organizer could lead to the department holding the property owner liable for the tax recovery. For the authorities, the venue is a fixed asset that can be attached if the organizer (who may be from a different state or unregistered) defaults on their tax obligations.

Actionable Advice for Venue Owners

Before allowing any event to take place on your property:

1. Update Your Contracts: Include clauses that mandate GST compliance by the organizer.

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2. Check Registration Status: Use the GST portal to verify if the organizer's GSTIN is active and matches their PAN.

3. Stay Informed: Requirements can vary slightly by state, so ensure you are aware of local circulars regarding event intimations.

Stay cautious—ensuring proper checks today can prevent heavy legal and financial liabilities tomorrow.

For expert guidance on this topic, contact your tax professional today.