Flat owners will have to pay GST at 18 per cent if their monthly contribution to resident welfare association (RWA) exceeds Rs 7,500, the Finance Ministry said Monday. As per the 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 the annual turnover of RWA by way of supply of services and goods exceeds Rs 20 lakhs.
In a circular issued to field offices on how should the RWA calculate GST payable where the maintenance charges exceed Rs 7,500 per month per member, the Finance Ministry said the exemption from GST on maintenance charges charged by an RWA from residents is available only if such charges do not exceed Rs 7,500 per month per member.
“In case the charges exceed Rs 7,500 per month per member, the entire amount is taxable. For example, if the maintenance charges are Rs 9,000 per month per member, GST @18 per cent shall be payable on the entire amount of Rs 9,000 and not on (Rs 9,000-Rs 7,500) = Rs 1,500,” it said.
On how the tax liability would be calculated for a person who owns two or more flats in the housing society or residential complex, the Ministry said in such cases the ceiling of Rs 7500 per month per member shall be applied separately for each residential apartment owned by him.