Order Date:  03 June 2022

Facts:

• The Applicant, M/s. Jayabheri Orange County Owners Association, is a Resident Welfare Association (RWA) collecting monthly maintenance charges, certain annual fee by name sinking fund and charges for electricity used in common area. 
• They are desirous of clarification as to whether these collections are liable to tax under GST.  

Issues:

• Whether the collections of monthly maintenance charges, certain annual fee by name sinking fund and charges for electricity used in common area are liable to tax under GST?

Order:

• The authorities observed that Serial No. 77 of Notification No. 12/2017 as amended vide Notification No. 02/2018 dt: 25.01.2018 states that service by an unincorporated body or a non-profit entity to its own members is exempt upto an amount of Rs. 7500 per member for sourcing goods or services from a 3rd person for the common use of its members in a housing society or a residential complex.
• If the maintenance charges are Rs.9000 per month per member, GST @18% shall be payable on the entire amount and not on the difference amount. Therefore, where the aggregate turnover of a Residents Welfare Association (RWA) exceeds Rs.20 lakhs in a financial year and the amount collected for maintenance per member exceeds Rs.7500/- then the entire amount is chargeable to GST at the rate of 18%.
• Further even if the annual turnover of the RWA is greater than Rs.20 lakhs but the monthly maintenance charged per person is Rs. 7500/- or less, then such RWA need not pay tax on the amounts so collected.  
• GST is not applicable on monthly collection of common area electricity charge paid by the members in addition to the Rs.7500 monthly maintenance charged on the basis of actual bill divided by carpet area pro rata charged to respective member’s flat carpet area.