Case Law Details
Case Name : Greenwood Owners Association Vs Union of India (Madras High Court)
Related Assessment Year :
Courts :
All High Courts Madras High Court
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Greenwood Owners Association Vs Union of India (Madras High Court)
In the case of Dilip Kumar (supra), the Supreme Court reiterates the settled proposition that an Exemption Notification must be interpreted strictly. The plain words employed in Entry 77 being, ‘upto’ an amount of 7,500/- can thus only be interpreted to state that any contribution in excess of the same would be liable to tax.
The term ‘upto’ hardly needs to be defined and connotes an upper limit. It is interchangeable
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Based on the above detailed explanation, HC said that only contributions above 7500/- will be liable for GST.
Then what about the ITC part ??
because ITC on exempt turnover is not available. hence we also need to reverse the ITC proportionately.
Kindly provide your view on the same so that it will be useful for all the readers.
I am not a CA but live in a condominium . My views are ;
1. GST liability on output billing of an RWA is eligible to be paid by Input tax credit on GST paid to vendors of input billing by goods and services providers .
2. It is important to make the budget for maintenance and upkeep charges based on estimated gross collections including GST and estimated gross expenditure including GST .
3. However most RWA’s fix the Common area maintenance ( CAM ) rate in Rs per sq ft based on invoiced value ( without GST ) and that is where the anomaly creeps in . Many services carry lower / nil GST and that is not captured in fixing the CAM rate . This results in excess GST collections in output billing compared to GST paid to vendors in input billing and thus a corresponding payout is made to the Govt as per notifications dated 22.7.19 by the ministry of finance which specifies GST to be collected on full value of the CAM invoice .
4. Even though input tax credit gets restricted by followimg the order of the Madras High court exempting Rs 7500 per month before GST is levied, it eliminates any chance of excess collection and thus any payout to Govt.
At the time of introduction of GST in July 2017 the intention of the govt was not to increase the total contribution by members of a cooperative housing society compared to the earlier service tax regime .
Since July 2019 after MOEF issued their notifications many RWA’s with maintenance charges above Rs 7500 pm have been depositing an amount equivalent to the differential between GST collection from its members less GST payment made by it to the vendors providing Goods and Servicds to the RWA. This cash outgo is penalising the members.
I welcome this decision and we shal like to implement it .What care should an RWA take before implementing it ? Any tips !
At the time of introduction of GST in July 2017 the intention of the govt was not to increase the total contribution by members of a cooperative housing society compared to the earlier service tax regime .
Since July 2019 after MOEF issued their notifications many RWA’s with maintenance charges above Rs 7500 pm have been depositing an amount equivalent to the differential between GST collection from its members less GST payment made by it to the vendors providing Goods and Servicds to the RWA. This cash outgo is penalising the members and was not the govt intention at the time of GST introduction.
I welcome this decision and we shal like to implement it .What care should an RWA take before implementing it . Any tips
OFFhand
Me have quickly gone through the HC Judgment / WRIT
As already pointed out in my recent Posts elsewhere – see the websites of FB and Linkedin- not even a whisper or remote reference has been made to the most crucial aspect of , -clinching the matter of controversy in a wolesome manner,- comonly known as the
‘ MUTUALITY -CONCEPT/ – DOCTRINE’.
Not having been addressed, the Court has not considered that aspect. Had it been done, the court might have possibly drcided the matter quite differently and from all attendant angles.
In this context, attention is once again invited, of all those having real (direct or indirect) concerns, including the practising professionals, to care and go through, in their own interests, the related Articles and comments avilable on this website itself.
May have more thoughts and view points to share for THE COMMON GOOD of those having vested interests.
courtesy