GST clarifications for Housing Socities
GST clarifications for Housing Societies
Date:10 Sep 2019

Recently the Department of Revenue has brought more clarity into the GST Calculation of Resident Welfare Associations (RWA). Here is are some major points that will you understand its impact on your society.

Q: Is RWA required to collect GST on Monthly maintenance collected from our members?

A: The GST is payable only in the below scenarios

  • Aggregate Turnover of your RWA > Rs.20 lakh per year
  • Maintenance charges per member/month > Rs. 7500

If any of these conditions are not met than GST charges are exempted.

 Q: If a member has multiple flats in the housing society, then how is the ceiling applied? Is It per month/member or it would be as per apartment?

As per norms, someone who has 2 or more residential apartments in a complex will be considered as individual owners per flat. The ceiling of Rs. 7500/- per month/member shall be applied separately for each residential apartment owned by him.

For example, if Mr. Sharma has 2 flats in society and pays Rs. 15000/- per month as maintenance charges. The maintenance charges for the bigger apartment is Rs.9000/- and for the smaller one Rs. 6000/-. The GST exemption will be for the one that is within the ceiling of Rs. 7500/-.

Q: Can the RWA take an input tax credit of GST for payment of Capital goods and Services towards our vendors?

A: Yes, RWA can claim an input tax credit of GST paid on capital goods like generators, water pumps, lawn furniture, and so on. Goods like taps, pipes, other sanitary/hardware fillings, etc. and input services such as repair and maintenance services are also included.

Q: How does RWA calculate the amount of GST payable wherein the maintenance charges exceed Rs. 7500/- per month per member?

A: In case the maintenance charges exceed the value of Rs. 7500/- per month/member, the entire amount is taxable. For example, if the maintenance charges are Rs. 11000/- per month/member, GST @18% shall be payable on the entire amount of Rs. 11000/- and not on [Rs. 11000 – Rs. 7500] = Rs. 3500/-.

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