Clarification on Issues related to GST on monthly subscription/contribution charged by a Residential Welfare Association from its members

Government through Circular No. 109/28/2019-GTS dated 22nd July, 2019 has clarified the above issue in details A brief on the same is provided below:

Below is a brief summary on when the Resident Welfare Association (‘RWA’) need to take GST registration and charge GST on monthly subscription/contribution:

Annual Turnover of Welfare Association Monthly Maintenance Charge per month per member* Whether RWA’s need to take registration and charge GST?
More than Rs. 20 lakhs More than Rs. 7,500/- Yes
Rs. 7,500 or less No
Rs. 20 lakhs or less More than Rs. 7,500/- No
Rs. 7,500 or less No

* Prior to 25th January, the limit was Rs. 5000/- per month per member

RWAs are entitled to take ITC of GST paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services such as repair and maintenance services.

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

In case the maintenance charges exceed Rs. 7,500 per month per member, GST has to be calculated on the total amount of maintenance. For eg. if the maintenance charges are Rs. 9,000/-, the GST will be payable on the entire amount of Rs. 9,000/- and not the difference between Rs. 9,000/- and Rs. 7,500/-.

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February 2021