There is a misconception floating all around that the services provided by a Housing Society [Resident Welfare Association (RWA)] will become expensive post GST. But that’s just the myth.

Let’s discuss as to how GST throws good impact on services provided by Housing Property/ RWA.

Relaxation upto Rs. 20 lakh

If the aggregate turnover of such RWA is up to Rs. 20 Lakh in a financial year, then such supplies would be exempted from GST even if charges per member are more than Rs. five thousand.

Entitlement of ITC with respect to capital goods & Input services

Unlike earlier, they would now be entitled to ITC in respect of taxes 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. ITC of Central Excise and VAT paid on goods and capital goods, due to which the tax burden on RWAs will be lower.

Exemption from GST

Services provided by RWA (unincorporated body or a registered non- profit entity) to its own members by way of reimbursement of charges or share of contribution up to an amount of five thousand rupees per month per member for providing services and goods for the common use of its members in a housing society or a residential complex are exempt from GST.

Withdrawal of exemption

RWA shall be required to pay GST on monthly subscription/contribution charged from its members if such subscription is more than Rs. 5000 per member and the annual turnover of RWA by way of supplying of services and goods is also Rs. 20 lakhs or more.

GST rate beyond the threshold limit

RWAs supplying of services and goods aggregating more than Rs 20 lakhs per annum will attract 18 per cent GST.

Sourcehttp://taxguru.in/goods-and-service-tax/gst-services-housing-society.html

Hope this information will help you in your Professional endeavors. For further assistance/query, feel free to write to us.

Author: C S Ekta Maheshwari is the Author of this article and is Company Secretary by profession. The Author can be reached at csektamaheshwari14@gmail.com 

Disclaimer: The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn’t constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information’s provided herein above.

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3 responses to “Relaxation under GST on Housing Society RWA, If Turnover below Rs. 20 lakh”

  1. vswami says:

    OFFHAND
    “Relaxation upto Rs. 20 lakh

    If the aggregate TURNOVER of such RWA is upto Rs.20 Lakh in a financial year, then such supplies would be exempted from GST even if charges per member are more than Rs. five thousand.”
    Posers:
    1. Presumably, such a relaxation has been announced, in recognition of the principle of mutuality’ applicable to any such members’ association, and its collections for utilization unto them. As such, why then the limited relaxation, instead of total /
    2. Concept of ‘Turnover’ – A fatal misconception; seems to have lead to / influenced such partial relaxation !

  2. NANDEESH says:

    Dear madem,

    Please clarify whether supply of goods and service of Rs. 20 Lakhs includes monthly Maintenance charges collected from Members?

  3. charteredaccountantsinmohali says:

    Great thanks for GST taxation knowledge…!! keep up the work…

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