There are some press reports that services provided by a Housing Society
[Resident Welfare Association (RWA)] will become expensive under GST.
These are completely unsubstantiated.
It may be mentioned that supply of service by RWA (unincorporated body
or a registered non- profit entity) to its own members by way of
reimbursement of charges or share of contribution up to an amount of
five thousand rupees 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.
Further, if the aggregate turnover of such RWA is upto Rs.20 Lakh in a
financial year, then such supplies would be exempted from GST even if
charges per member are more than Rs. five thousand.
RWA shall be required to pay GST on monthly subscription/contribution
charged from its members if such subscription is more than Rs. 5000 per
member and the annual turnover of RWA by way of supplying of services
and goods is also Rs. 20 lakhs or more. Under GST, the tax burden on
RWAs will be lower for the reason that they would now be entitled to 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. ITC of Central Excise and VAT paid on goods and capital goods
was not available in the pre-GST period and these were a cost to the
RWA.
Thus, there is no change made to services provided by the Housing Society (RWA) to its members in the GST era.
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