GST on monthly subscription/contribution charged by a Residential Welfare Association (RWA)

Circular No. 109/28/2019 dt. 22.07.2019

GST on monthly subscription/contribution charged by a Residential Welfare Association (RWA) from its members:-

♣ Supply of service by RWA (unincorporated body or a nonprofit entity registered under any law) to its own members by way of reimbursement of charges or share of contribution up to an amount of Rs. 7500 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.

♣ If aggregate turnover of an RWA does not exceed Rs20 lakhs / 40 Lakh (w.e.f. 01.04.2019) in a financial year, it shall not be required to take registration and pay GST even if the amount of maintenance charges exceeds Rs. 7500/- per month per member.

♣ RWA shall be required to pay GST on monthly subscription/ contribution charged from its members, only if such subscription is more than Rs. 7500/- per month per member and the annual aggregate turnover of RWA by way of supplying of services and goods is also Rs. 20 lakhs / 40 lakhs (w.e.f. 01.04.2019) or more.

• 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.
• A person owns two or more flats in the housing society or residential complex: 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.
• The exemption from GST on maintenance charges charged by a RWA from residents is available only if such charges do not exceed Rs. 7500/- per month per member. In case the charges exceed Rs. 7500/- per month per member, the entire amount is taxable. For example, if the maintenance charges are Rs. 10000/- per month per member, GST @18% shall be payable on the entire amount of Rs. 10000/- and not on [Rs. 10000 – Rs. 7500] = Rs. 2500/-.