{"id":15351,"date":"2020-08-26T12:47:44","date_gmt":"2020-08-26T07:17:44","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=15351"},"modified":"2021-01-15T12:21:07","modified_gmt":"2021-01-15T06:51:07","slug":"gst-payable-on-the-amount-charged-by-resident-welfare-association","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/gst-payable-on-the-amount-charged-by-resident-welfare-association\/","title":{"rendered":"GST payable on the amount charged by Resident Welfare Association"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Ministry of Finance has issued a clarification which was regarding the numerous queries on the issue regarding the GST payable on an amount charged by the Resident Welfare Association. It was for providing services and goods for the common use of an area by its members in a housing society or a residential complex.  <\/p>\n\n\n\n<p>The <strong><em>Finance Ministry<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Ministry_of_Finance_(India)\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> has recently clarified in the circular that exemption from GST is available if the charges do not exceed Rs 7500 per month. Resident Welfare Association collects GST on fees charged from the members who own flats in their society. If the monthly payment of maintenance fees is more than Rs. 7500 per apartment per month and also the annual turnover of the Resident Welfare Association exceeds the defined limit of Rs. 20 lakhs by way of supply of services and goods. <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST<\/strong><\/a> must be collected @ 18% on the monthly maintenance fees charged. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/gst-payable-on-the-amount-charged-by-resident-welfare-association\/#Registration_Requirement_for_Resident_Welfare_Association\" >Registration Requirement for Resident Welfare Association<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/gst-payable-on-the-amount-charged-by-resident-welfare-association\/#How_shall_the_GST_amount_be_calculated_on_RWA_Charges\" >How shall the GST amount be calculated on RWA Charges?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/gst-payable-on-the-amount-charged-by-resident-welfare-association\/#Following_are_GST_Clarification_on_Resident_Welfare_Association_Charges\" >Following are GST Clarification on Resident Welfare Association Charges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/gst-payable-on-the-amount-charged-by-resident-welfare-association\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Registration_Requirement_for_Resident_Welfare_Association\"><\/span>Registration Requirement for Resident Welfare Association<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table>\n<tbody>\n<tr>\n<table class=\"table table-bordered\">\n<td width=\"154\">\n<p><strong><em>Aggregate Turnover of Society<\/em><\/strong><\/p>\n<\/td>\n<td width=\"154\">\n<p><strong><em>Monthly maintenance per member<\/em><\/strong><\/p>\n<\/td>\n<td width=\"154\">\n<p><strong><em>Exemption from Registration<\/em><\/strong><\/p>\n<\/td>\n<td width=\"154\">\n<p><strong><em>Remarks<\/em><\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"154\">\n<p>Less than Rs 20 Lakhs<\/p>\n<p>&nbsp;<\/p>\n<\/td>\n<td width=\"154\">\n<p>Rs 7500 or less<\/p>\n<\/td>\n<td width=\"154\">\n<p>Exempt<\/p>\n<\/td>\n<td width=\"154\">\n<p>&#8211;<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"154\">\n<p>Less than Rs 20 Lakhs<\/p>\n<p>&nbsp;<\/p>\n<\/td>\n<td width=\"154\">\n<p>Rs 7500 (for some members less than Rs 7500 PM)<\/p>\n<p>&nbsp;<\/p>\n<\/td>\n<td width=\"154\">\n<p>Exempt<\/p>\n<\/td>\n<td width=\"154\">\n<p>&#8211;<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"154\">\n<p>More than Rs 20 Lakhs<\/p>\n<p>&nbsp;<\/p>\n<\/td>\n<td width=\"154\">\n<p>Rs 7500 or less&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n<\/td>\n<td width=\"154\">\n<p>Exempt<\/p>\n<\/td>\n<td width=\"154\">\n<p>&nbsp;<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"154\">\n<p>More than Rs 20 Lakhs<\/p>\n<p>&nbsp;<\/p>\n<\/td>\n<td width=\"154\">\n<p>Rs 7500 or more (for some members less than Rs 7500 PM)<\/p>\n<\/td>\n<td width=\"154\">\n<p>Not Exempt<\/p>\n<\/td>\n<td width=\"154\">\n<p>The registration condition only arises when the aggregate turnover exceeds Rs 20 lakhs and monthly maintenance per member exceeds Rs 7500\/-<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_shall_the_GST_amount_be_calculated_on_RWA_Charges\"><\/span>How shall the GST amount be calculated on RWA Charges?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For example, if maintenance charges are Rs. 10,000 per month per member, GST @ 18% must be payable on the entire amount of Rs per month. 10,000 and not on the left out amount after exemption (10,000-7500=2500). Therefore, GST will come out to be 10,000 multiply by 18%= 1800.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"625\" height=\"459\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-107.png\" alt=\"GST amount be calculated on RWA Charges\" class=\"wp-image-15352\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-107.png 625w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-107-300x220.png 300w\" sizes=\"(max-width: 625px) 100vw, 625px\" \/><\/figure><\/div>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/coupons-and-vouchers-under-gst\/\">Coupons and Vouchers under GST<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Following_are_GST_Clarification_on_Resident_Welfare_Association_Charges\"><\/span>Following are GST Clarification on Resident Welfare Association Charges <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>\u201cIssue- What is an exemption limit under the GST on maintenance charges\npaid by residents to the Resident Welfare Association in a housing society?\u201d<\/em><\/strong><\/p>\n\n\n\n<p><strong><em>Clarification- <\/em><\/strong>Supply of service by RWA (unincorporated body or\na non- profit entity registered under any law) to its members by way of the\nreimbursement of charges or share of contribution up to the amount of the Rs.\n7500 per month per member for providing goods and services for the common use\nof an area for its members in the housing society or the residential complex\nare exempt from GST. Till Jan 25, 2018, the limit was Rs 5,000 per month per\nmember.<\/p>\n\n\n\n<p><strong><em>\u201cIssue- Can RWA Claim ITC on GST paid on Input and Services paid for making\nsupplies to members?\u201d<\/em><\/strong><\/p>\n\n\n\n<p><strong><em>Clarification- <\/em><\/strong>RWAs are entitled to take ITC of GST paid by\nthem on the capital goods such as water pumps, generators, lawn furniture,\netc.), and other goods such as pipes, taps, other sanitary and hardware\nfillings, etc.) and also on input services such as repair and maintenance\nservices.<\/p>\n\n\n\n<p><strong><em>\u201cIssue-How must the Resident Welfare Association calculate GST payable\nwhere the maintenance charges exceed Rs 7500 per month per member? Is the GST\npayable only on an amount exceeding Rs 7500 or the entire maintenance charges?\u201d<\/em><\/strong><\/p>\n\n\n\n<p><strong><em>Clarification-<\/em><\/strong>The exemption from the GST on maintenance charges\ncharged by an RWA from residents is available only if the charges do not exceed\nRs 7500 per month per member. In case the charges exceed Rs 7500 per month, the\nentire amount will be taxable. <strong>For\nexample,<\/strong> if the RWA maintenance charges are Rs. 9000 per month per member\nis levied, then GST @18% must be payable on the entire amount of Rs. 9000 and\nnot on [Rs. 9000 \u2013 Rs. 7500] = Rs. 1500.<\/p>\n\n\n\n<p><strong><em>\u201cIssue- Where the person has two or more flats in the housing society\nor residential complex, whether the ceiling of Rs. 7500 per month per member on\nthe maintenance for the exemption to be available must be applied per\nresidential apartment or per person?\u201d<\/em><\/strong><\/p>\n\n\n\n<p><strong><em>Clarification-<\/em><\/strong>A person who has two or more residential apartments in the housing society or the residential complex must normally be a member of the RWA for each residential apartment owned by him separately. The charges of Rs. 7500\/- per month per member must be applied separately for each residential apartment owned by him. <\/p>\n\n\n\n<div class=\"shadow1\"><strong>For example:<\/strong> If a person two has residential apartments in a residential complex and he pays Rs. 15000 per month as maintenance charges towards the maintenance of each apartment (Rs. 7500\/- per month of each residential apartment), the exemption from GST will be available to each apartment.<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per the rules, Resident Welfare Association is required\nto collect GST on monthly subscription and contribution charged from its\nmembers if the payment is more than Rs 7500 per month per apartment and an\nannual turnover of RWA by way of supply of services and goods exceeds Rs 20\nlakhs.<\/p>\n\n\n\n<p>Resident Welfare Association is eligible to take Input Tax Credit (ITC) of GST paid by RWA\u2019s on the capital goods and input services. The Finance Ministry in the circular clarified an exemption from the GST is available if the charges do not exceed Rs 7500 per month per member.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/selective-applicability-of-gst-regulation-by-aar\/\">Latest: Selective Applicability of GST Regulation by AAR<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ministry of Finance has issued a clarification which was regarding the numerous queries on the issue regarding the GST payable on an amount charged by the Resident Welfare Association. It was for providing services and goods for the common use of an area by its members in a housing society or a residential complex. The [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":15359,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16,153],"tags":[921],"acf":{"service_id":"96"},"authorName":"Soumya Bajpai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/0.jpg","authorDescription":"Soumya has done LLB (Hons) and has a 2+years experience in writing. Her main interest is in reading judgments, new enactments and amendments taking around in law. She always strives to bring the best to work that she does.","postViews":5365,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15351"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=15351"}],"version-history":[{"count":11,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15351\/revisions"}],"predecessor-version":[{"id":24215,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15351\/revisions\/24215"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/15359"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=15351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=15351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=15351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}