GST Council recommends granting relief from GST on services provided by the Resident Welfare Associations (RWAs) to their Members

Threshold Exemption Limit under GST for monthly contributions made by members for services provided by RWAs raised from Rs. 5,000 to Rs. 7,500 per month per person

In its 25th Meeting held on 18th January, 2018, the GST Council had recommended several measures granting relief from GST on a number of goods and services. One of the important reliefs granted by the Council is to enhance the limit of contribution made by members of a Resident Welfare Association (RWA) for the purpose of exemption from GST.

The Council had recommended that the limit may be enhanced from Rs.5,000 to Rs 7,500 per month per member. Services provided by RWAs (unincorporated body or a registered nonprofit entity) to their members were hitherto exempt against contribution of up to an amount of five thousand rupees per month per member. Requests were received from several quarters to enhance the contribution limit of five thousand rupees per month per member for exemption.

As a result, RWAs shall be required to pay GST on monthly subscription/contribution charged from its members if such subscription is more than Rs.7,500 per month per member and the Annual Turnover of RWA by way of supplying of services and goods is also Rs. 20 lakhs or more.

Under GST, the tax burden on RWAs will be lower for the reason that they would now be entitled to Input Tax Credit (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 was not available in the preGST period and these were a cost to the RWA.

The Notifications giving effect to the above recommendations of the GST Council have been issued and have come into force on 25th January, 2018. Accordingly, from 25 January 2018, the services provided by Resident Welfare Association to its members against contribution-up to an amount of Rs 7,500per month per member have been exempted from GST.

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Category : Goods and Services Tax (6437)
Type : News (13494)
Tags : goods and services tax (4929) GST (4532)

3 responses to “Relief from GST on services provided by RWAs”

  1. vswami says:

    OFFHAND
    “Under GST, the tax burden on RWAs will be lower for the reason that they would now be entitled to Input Tax Credit (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 ……was not available in the pre–GST period and these were a cost to the RWA.”

    To one’s understanding, confining self to the limited point, there appears to be a patent fallacy and misguided mix-up of the attendant reality; for, that has pathetically over sighted the fact that the referred taxes on capital goods are paid and borne by the promoter/builder during the construction period; not after its completion and the property has been sold , finally transferred / taken over by the body of purchasers.

    Strongly feel that the matter requires to be re-looked into, and clarified, sooner the better, so as to avoid any further mess up.

    Open to correction, should there at all be a view possible, but materially distinct !

  2. SANJEEV KUMAR B SHAH says:

    What if the building is maintained by the builder/developer? Is the exemption limit of Rs.7500 available to the RWA/Cooperative Societies available to the builder also who has still not formed the society and is maintaining the building and collecting reimbursements of property tax and maintenance expenses from the unit owners?

  3. Venkatesan Iyengar says:

    What will be criteria for e way bill?
    The imported goods being transported to within municipality limit of the port should be exempted from Eway bill.

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