Mumbai, February 7, 2018
Monthly maintenance charges, which one pays to co-operative housing society (CHS) or to be specific to its resident welfare association (RWA), will not attract Goods and Service Tax (GST), provided such charges are Rs. 7,500 or less per month.
The GST Council in its meeting held 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 apply from January 25.
There is no change in the GST registration requirement for CHS. It has to register if it's annual turnover is Rs. 20 lakh or more.
An official release by the Ministry of Finance, issued on Wednesday, February 7, 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. 20 lakhs 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 tony 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 a lakh. These charges payable by members are typically a reimbursement for expenses incurred by the CHS.
The CBEC in an FAQ has earlier clarified that sinking fund, repairs & maintenance fund, car parking charges, non-occupancy charges, or simple interest for late payment of the dues of the CHS would be covered by GST as these are collected by the CHS for supply of services meant for its members.
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.
[The Times of India]