Resident Welfare Association/ Housing Society in GST

Registration requirement for RWA

The Association of Resident Welfare (RWA) is classified in accordance with the Income Tax Law as an Association of persons. A Resident Welfare Association (RWA) is a company that represents people who live in a community or a company’s interests.

The association is responsible for supervising the occupants’ everyday problems, arranging events, supervising facilities in the apartments and houses, and also representing the members where necessary on issues related to the place.

If the aggregate turnover of such RWA is up to Rs.20 Lakh in a financial year, then such supplies would be exempted from GST even if charges per member are more than Rs. 7500.

An RWA has an annual Receipt turnover in a FY of INR 20,00,000/- or less. Are GST registrations required and GST charged for maintenance?

No, the RWA will not be required to register and charge GST as, in the financial year, the total turnovers of its INR 20,00,000/- do not exceed Rs 7,500 per month per member.

Furthermore, it would not be necessary to register and charge GST where the total turnover in a financial year exceeded INR 20,00,000/-, but the maintenance monthly costs per member were up to rs.7,500. The above can be concluded in the below summary table:

Sl. No.	Is GST chargeable for any goods/services supplied by the RWA?	Are the maintenance charges per month per member more than Rs.7,500?	Is GST registration required?	Is the aggregate turnover Rs.20 lakh or more in the financial year?
1	No	No	No	No
2	No	No	No	Yes
3	No	Yes	No	No
4	Yes	Yes	Yes	Yes

GST Registration Document Requirement

Exemption Limit for RWA and Updates

RWA shall be required to pay GST on monthly subscription/contribution charged from its members if such subscription is more than Rs. 7500 per member and the annual turnover of RWA by way of supplying of services and goods is also Rs. 20 lakhs or more.

25th GST Council Meeting enhances the exemption limit of Rs 5000/- per month per member to Rs 7500/- in respect of services provided by Resident Welfare Association (unincorporated or nonprofit entity) to its members against their individual contribution.

The late fee for delayed filing of GSTR-1 is being reduced to Fifty Rupees per day and shall be Rupees Twenty Five in case of Nil returns.

Is RWA claim a GST ITC on inputs & services used to supply its members?

Input Tax Credit (ITC) Allowed: If the Society becomes liable to pay GST, it is allowed to take Input Tax Credit under Sec 16 (1) of CGST Act subject to conditions for taking the input tax credit. Housing Society is 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 – Lift AMC, Housekeeping, Security, Fire AMC, Repairs & Maintenance, Contract staff, Accounting & Auditing Services, and other such services.

Yes, where the fee for such supplies exceeds Rs.7,500 per month per member, most of the ITCs would be available as follows:

• Input services like AMC on CCTV, maintenance, and repair services.
• Goods like pipes, tapes, other toilet fillers, etc.
• Capital products like lawn mobilizers, generators, pumps for water, etc.

 

ITC of Central Excise and VAT paid on goods and capital goods were not available in the pre-GST period and these were a cost to the RWA.

TAX RATE APPLICABLE ON RWA

As per Notification No. 11/2017-Central Tax (Rate)  for services related to Services furnished by businesses, employers, and professional organizations Services, Services furnished by trade unions & Services furnished by other membership organizations falling under SAC 9995 the Central Tax Rate is 9%. Similar Provisions are made under SGST Acts also. Therefore there will a levy of 18% (CGST @ 9% + SGST @9%).

Composition Scheme

Housing Society is not eligible for Composition Scheme.

RETURNS AND DUE DATES

All the Registered Persons (Normal Registration) will have to file 3 returns in a month.

GSTR – 1 by 10th of the following month  – Towards Outward Supply (Maintenance Charges)

GSTR – 2 by 15th of the following month –Towards Expenses Side and

In GSTR – 3 by 20th of the following month – Monthly consolidated return and

GSTR – 9 by 31st December of the Following Year.

GSTR-3B Return

GSTR-3B return will have to be filed by all taxpayers in addition to GSTR-1, GSTR-2 and GSTR-3 return. Earlier, GSTR-3B returns were to be filed for the month of July to December 2017.

IN the 23rd council meeting, it has been announced that the GSTR-3B return must be filed for all months from July 2017 to March 2018. The due date for the GSTR-3B return will be the 20th of every month.

FEE FOR LATE FILING OF GST RETURN

When a Registered Dealer misses filing GST Returns within DUE DATE late fees is levied by the government.

If GSTR-1 is not filed within the due date you will be liable to pay late fees of Rs. 200 per day of delay

Records and Accounts

Maintain proper Records of Supply & Expenses and preserve such records for 72 Months.

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