Circular No.: 109/28/2019-GST
Date of Circular: 22nd July 2019
Relevant Sections and Rules:
- CGST Act, 2017:
- Section 9: Levy of tax
- Section 168(1): Power to issue instructions
- Notification Referenced:
- Notification No. 12/2017-Central Tax (Rate), Entry 77(c)
- Amended by Notification No. 2/2018-CT(R) dated 25.01.2018
Summary of Circular:
This circular provides clarifications regarding GST applicability on monthly maintenance charges collected by Residential Welfare Associations (RWAs) from members of housing societies and residential complexes.
- GST Exemption Threshold:
- Services provided by an RWA (unincorporated body or registered nonprofit) to its members are exempt from GST if:
- Monthly subscription/maintenance charges do not exceed ₹7,500 per month per member.
- Prior to 25.01.2018, the limit was ₹5,000.
- Refer Entry 77(c) of Notification No. 12/2017-CT(R).
- Requirement for GST Registration:
- If the RWA’s aggregate turnover is ₹20 lakh or less annually, it is not required to register for GST, regardless of monthly charges.
- RWA is liable to register and pay GST only if:
- Monthly charges exceed ₹7,500 per member, and
- Annual turnover exceeds ₹20 lakh.
| Turnover | Monthly Charges | GST Applicability |
| > ₹20 lakh | > ₹7,500 | Yes |
| > ₹20 lakh | ≤ ₹7,500 | No |
| ≤ ₹20 lakh | Any amount | No |
- Eligibility for Input Tax Credit (ITC):
- RWAs are entitled to claim ITC on:
- Capital goods (e.g., generators, pumps)
- Goods (e.g., sanitary items)
- Input services (e.g., maintenance and repair)
- Applicability When Member Owns Multiple Apartments:
- ₹7,500 threshold is applicable per residential apartment.
- For example, a person with 2 flats paying ₹7,500 per flat per month is entitled to exemption for each apartment separately.
- Taxability on Charges Exceeding ₹7,500:
- If monthly charges exceed ₹7,500, GST applies to the entire amount, not just the excess.
- Example: For charges of ₹9,000/month, GST @18% is levied on full ₹9,000, not only ₹1,500.
Source: Circular No.: 109/28/2019-GST
