GST Exemption Limit Enhanced to Rs. 7,500 for Monthly Charges Paid to a Housing Society:

Monthly maintenance charges, which one pays to cooperative housing society(CHS) or be specific to its resident welfare association (RWA), will not attract good 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 its annual turnover is Rs. 20 lakh or more.

An official release by the ministry of finance, issued on Wednesday, February 7, 2018 clarifies that RWAs shall be required to pay GST non 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 and 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 foe various purpose like providing security, lift maintenance, maintenance of common areas like lobby or garden. In tony luxury housing societies which have facilities like club house, gym, or swimming pool the monthly charges are steep, running up to more than lakh. These charges payable by members are typically a reimbursement for expense incurred by the CHS.

The CBEC in an FAQ has earlier clarified that sinking fund, repairs and maintenance fund, car parking charges, non-occupancy charges, or simple interest for late payment of dues of the CHS would be covered by GST as these are collected by the CHS for supply of services 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 (generator, water, pumps, lawn furniture etc) goods (taps, pipes, other sanitary/hardware filings etc) and input services such as repair and maintenance services.

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Disclaimer: The content has been sourced from a third party, therefore, we are not liable for the relevance and accuracy of the content. The article referred from Times Of India/ India Times