Resident Welfare Association (RWAs) will be required to pay GST on monthly subscription 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. 2 million or more.
The GST Council in its meeting in January has enhanced the threshold applicability limit. Earlier GST was applicable if the monthly bill was more than Rs. 5,000 per month. The new limits are effective from Jan 25.
There is no change in the GST registration requirement for Cooperative Housing Society. It has to register if its annual turnover is Rs. 2 million or more.
A Ministry of Finance statement clarifies that: RWAs shall be required to pay GST on monthly subscription 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. 2 million or more. Thus smaller CHS with a lower turnover do not have to register under GST and comply with its various obligations.
Maintenance charges are collected by a CHS for various purposes like providing security, lift maintenance, maintenance of common areas like a lobby or a garden. In luxury housing societies, which have facilities like a club house, gym or swimming pool, the monthly maintenance charges are steep, running up to more than Rs 100,000. These charges payable by members are typically a reimbursement for expenses incurred by the CHS.
The official release adds that under GST the tax burden on RWAs will be lower as 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.