Circular No.109/28/2019- GST
1
22-07-2019
F. No. 332/04/2017-TRU
Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)
*****
New Delhi, the 22nd July, 2019
To,
The Principal Chief Commissioner/ Chief Commissioners/ Principal
Commissioner/ Commissioner of Central Tax (All)/ The Principal Director
Generals/ Director Generals (All)
Madam/ Sir,
Subject: Issues related to GST on monthly subscription/contribution charged by
a Residential Welfare Association from its members- reg.
A number of issues have been raised regarding the GST payable on the
amount charged by a Residential Welfare Association for providing services and
goods for the common use of its members in a housing society or a residential
complex. The same have been examined and are being clarified below.
Sl.
No.
Issue
Clarification
1.
Are the maintenance charges
paid by residents to the
Resident Welfare Association
(RWA) in a housing society
exempt from GST and if yes,
is there an upper limit on the
amount of such charges for
the
exemption
to
be
available?
Supply of service by RWA (unincorporated
body or a non- profit 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.
Prior to 25th January 2018, the exemption was
available
if
the
charges
or
share
of
contribution did not exceed Rs 5000/- per
month per member. The limit was increased to
Rs. 7500/- per month per member with effect
from 25th January 2018. [Refer clause (c) of Sl.
No. 77 to the notification No. 12/2017- Central
Tax (Rate) dated 28.06.2017 as amended vide
notification No. 2/2018- Central Tax (Rate),
dated 25.01.2018]
Circular No.109/28/2019- GST
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22-07-2019
2.
A
RWA
has
aggregate
turnover of Rs.20 lakh or less
in a financial year. Is it
required to take registration
and pay GST on maintenance
charges if the amount of such
charges is more than Rs.
7500/-
per
month
per
member?
No. If aggregate turnover of an RWA does not
exceed Rs.20 Lakh 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 or more.
Annual
turnover
of
RWA
Monthly
maintenance
charge
Whether
exempt?
More
than
Rs. 20 lakhs
More than Rs.
7500/-
No
Rs. 7500/- or
less
Yes
Rs. 20 lakhs
or less
More than Rs.
7500/-
Yes
Rs. 7500/- or
less
Yes
3.
Is the RWA entitled to take
input tax credit of GST paid
on input and services used by
it for making supplies to its
members and use such ITC
for discharge of GST liability
on such supplies where the
amount charged for such
supplies is more than Rs.
7,500/-
per
month
per
member?
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.
4.
Where a person owns two or
more flats in the housing
society
or
residential
complex, whether the ceiling
of Rs. 7500/- per month per
member on the maintenance
for the exemption to be
available shall be applied per
residential apartment or per
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.
Circular No.109/28/2019- GST
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22-07-2019
person?
For example, if a person owns two residential
apartments in a residential complex and pays
Rs. 15000/- per month as maintenance charges
towards maintenance of each apartment to the
RWA (Rs. 7500/- per month in respect of each
residential apartment), the exemption from
GST shall be available to each apartment.
5.
How
should
the
RWA
calculate GST payable where
the
maintenance
charges
exceed Rs. 7500/- per month
per member? Is the GST
payable only on the amount
exceeding Rs. 7500/- or on
the
entire
amount
of
maintenance charges?
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.
9000/- per month per member, GST @18%
shall be payable on the entire amount of Rs.
9000/- and not on [Rs. 9000 - Rs. 7500] = Rs.
1500/- .
2.
Difficulty, if any, in implementation of the Circular may be brought to the
notice of the Board.
22-07-2019
Susanta Kumar Mishra
Technical Officer (TRU-II)
Contact No: 011-23095558
e-mail: susanta.mishra87@gov.in
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