In re M/s Vaishnavi Splendour Home Owners Welfare Association (GST AAR Karnataka)
i. Whether the applicant is liable to pay CGST and SGST on the amount of contribution received from its members?
The applicant is liable to pay CGST and SGST on the amount of contribution received from its members as their activities of amounts to taxable supply of service.
ii. If the answer to (i) above is “yes”, whether it can avail the benefit of Notification No.12/2017 dated 28-6-2017 (Sl. No. 77) read with Notification No.2/2018 dated 25-1-2018 which provide for exempting from tax, the value of supply up to an amount of Rs. 7,500 per month per member ?
The benefit of exemption, under entry no.77 of Notification No. 12/2017 –Central Tax (Rate) dated 28.06.2017 (as amended by Notification No.02/ 2018 – Central Tax (Rate) dated 25.01.2018), is available to the applicant only if maintenance charges (contributions) do not exceed Rs.7,500/ – per month per In case the charges exceed Rs.7,500/ – per month per member, the entire amount is taxable.
iii. If the answer to (ii) above is “yes”, whether it is required to restrict its claim of input tax credit ?
The applicant is eligible to claim input tax credit on the inward supplies of goods and services and this is subject to the restrictions as enumerated in Section 17(2) of the CGST Act read with Rule 42 of the CGST Rules and other restrictions applicable if any.
iv. Whether the applicant is liable to pay CGST/SGST on amounts which it collects from its members for setting up a corpus fund
The applicant is not liable to pay CGST/ SGST on amounts collected from members for setting up a corpus fund.
