18% GST on flat owners paying monthly maintenance of over Rs 7,500

Flat owners will have to pay GST at 18 per cent if ir monthly contribution to resident welfare association (RWA) exceeds Rs 7,500, Finance Ministry said on Monday.

As per rules, RWAs are required to collect GST on monthly subscription/contribution charged from its members if such payment is more than Rs 7,500 per flat per month and annual turver of RWA by way of supply of services and goods exceeds Rs 20 lakhs.

In a circular issued to field offices on how should RWA calculate GST payable where maintenance charges exceed Rs 7,500 per month per member, Finance Ministry said exemption from GST on maintenance charges charged by an RWA from residents is available only if such charges do t exceed Rs 7,500 per month per member. 

"In case charges exceed Rs 7,500 per month per member, entire amount is taxable. For example, if maintenance charges are Rs 9,000 per month per member, GST @18 per cent shall be payable on entire amount of Rs 9,000 and t on (Rs 9,000-Rs 7,500) = Rs 1,500," it said.

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On how tax liability would be calculated for a person who owns two or more flats in housing society or residential complex, Ministry said in such cases ceiling of Rs 7500 per month per member shall be applied separately for each residential apartment owned by him. 

"For example, if a person owns two residential apartments in a residential complex and pays Rs 15,000 per month as maintenance charges towards maintenance of each apartment to RWA (Rs. 7500/- per month in respect of each residential apartment), exemption from GST shall be available to each apartment," it said.

Ministry furr clarified that RWAs are entitled to take input tax credit (ITC) of Goods and Services Tax (GST) paid by m on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, or sanitary/hardware fillings etc.) and input services such as repair and maintenance services. 

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