Circular No. 109/28/2019-GST [C10-3TM]

A number of issues have been raised regarding the GST payable on the amount charged by a Residential Welfare Association for providing services and goods for the common use of its members in a housing society or a residential complex. The same have been examined and are being clarified below.

Sl. Issue Clarification No.

1. Are the maintenance charges Supply of service by RWA (unincorporated paid by residents to the body or a non- profit entity registered under Resident Welfare Association any law) to its own members by way of (RWA) in a housing society reimbursement of charges or share of exempt from GST and if yes, contribution up to an amount of Rs. 7500 per is there an upper limit on the month per member for providing services and amount of such charges for goods for the common use of its members in a the exemption to be housing society or a residential complex are available? exempt from GST.

Prior to 25th January 2018, the exemption was available if the charges or share of contribution did not exceed Rs 5000/- per month per member. The limit was increased to Rs. 7500/- per month per member with effect from 25th January 2018. [Refer clause (c) of Sl. No. 77 to the notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended vide notification No. 2/2018- Central Tax (Rate), dated 25.01.2018]

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Circular No.109/28/2019- GST

2. A RWA has aggregate No. If aggregate turnover of an RWA does not turnover of Rs.20 lakh or less exceed Rs.20 Lakh in a financial year, it shall in a financial year. Is it not be required to take registration and pay required to take registration GST even if the amount of maintenance and pay GST on maintenance charges exceeds Rs. 7500/- per month per charges if the amount of such member. charges is more than Rs. 7500/- per month per RWA shall be required to pay GST on monthly member? subscription/ contribution charged from its members, only if such subscription is more than Rs. 7500/- per month per member and the annual aggregate turnover of RWA by way of supplying of services and goods is also Rs. 20 lakhs or more. Annual Monthly Whether turnover of maintenance exempt? RWA charge More than More than Rs. No Rs. 20 lakhs 7500/- Rs. 7500/- or Yes less Rs. 20 lakhs More than Rs. Yes or less 7500/- Rs. 7500/- or Yes less

3. Is the RWA entitled to take RWAs are entitled to take ITC of GST paid by input tax credit of GST paid them on capital goods (generators, water on input and services used by pumps, lawn furniture etc.), goods (taps, pipes, it for making supplies to its other sanitary/hardware fillings etc.) and input members and use such ITC services such as repair and maintenance for discharge of GST liability services. on such supplies where the amount charged for such supplies is more than Rs. 7,500/- per month per member?

4. Where a person owns two or As per general business sense, a person who more flats in the housing owns two or more residential apartments in a society or residential housing society or a residential complex shall complex, whether the ceiling normally be a member of the RWA for each of Rs. 7500/- per month per residential apartment owned by him member on the maintenance separately. The ceiling of Rs. 7500/- per for the exemption to be month per member shall be applied separately available shall be applied per for each residential apartment owned by him. residential apartment or per

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Circular No.109/28/2019- GST

person? For example, if a person owns two residential apartments in a residential complex and pays Rs. 15000/- per month as maintenance charges towards maintenance of each apartment to the RWA (Rs. 7500/- per month in respect of each residential apartment), the exemption from GST shall be available to each apartment.

5. How should the RWA The exemption from GST on maintenance calculate GST payable where charges charged by a RWA from residents is the maintenance charges available only if such charges do not exceed exceed Rs. 7500/- per month Rs. 7500/- per month per member. In case the per member? Is the GST charges exceed Rs. 7500/- per month per payable only on the amount member, the entire amount is taxable. For exceeding Rs. 7500/- or on example, if the maintenance charges are Rs. the entire amount of 9000/- per month per member, GST @18% maintenance charges? shall be payable on the entire amount of Rs. 9000/- and not on [Rs. 9000 - Rs. 7500] = Rs. 1500/- .

2. Difficulty, if any, in implementation of the Circular may be brought to the notice of the Board.

22-07-2019 Susanta Kumar Mishra Technical Officer (TRU-II) Contact No: 011-23095558 e-mail: susanta.mishra87@gov.in

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