18% GST for Flat owners paying more than Rs 7,500 maintenance

Flat owners should pay GST at 18 percent if their monthly contribution to resident welfare association (RWA) surpasses Rs 7,500, the Finance Ministry said Monday. According to the rules, RWAs are required to gather GST on monthly membership/commitment charged from its members if such installment is more than Rs 7,500 for each flat for every month and the yearly turnover of RWA by method for supply of services and goods surpasses Rs 20 lakhs.

In a circular issued to handle workplaces on in what manner should the RWA figure GST payable where the maintenance charges surpass Rs 7,500 every month for every member, the Finance Ministry said the exclusion from GST on maintenance charges charged by a RWA from residents is accessible just if such charges don’t surpass Rs 7,500 per month for each member.

“In case the charges surpass Rs 7,500 every month for every member, the whole amount is taxable. For instance, if the maintenance charges are Rs 9,000 every month for each member, GST @18 percent will be payable on the whole measure of Rs 9,000 and not on (Rs 9,000-Rs 7,500) = Rs 1,500,” it said.

On how the tax liability would be determined for an individual who possesses at least two flats in the housing society or residential complex, the Ministry said in such cases the ceiling of Rs 7500 per month per member will be applied independently for each residential apartment owned by him.

“For instance, if an individual owns two residential apartments in a private complex and pays Rs 15,000 per month as maintenance charges towards maintenance of every apartment to the RWA (Rs. 7500/ – every month in regard of each residential apartment), the exclusion from GST will be accessible to every apartment,” it said.

The Ministry further explained that RWAs are qualified to take input tax credit (ITC) of Goods and Services Tax (GST) paid by them on capital goods (generators, water pumps, lawn furniture and so forth.), goods (taps, funnels, other sterile/equipment fillings and so forth.) and input services, for example, repair and maintenance services.

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