G Viswanathan, Director, Accounting & Business Support, Chennai wrote an article for Taxsutra on Collection of GST by RWA with Monthly Subscription below INR 7,500.
An integral part of life for many people that stay in High Rise Apartments/Complex is the Resident Welfare Association (RWA). The RWA collects monthly subscriptions from its occupants which they then use for maintenance of the housing facilities. These subscriptions started getting taxed in June 2005, a trend which continued even in the GST regime. The RWA charges a sum below Rs 7,500 per month as subscription which is exempt from tax. However, the GST paid on the amounts charged by the Third Party Service Providers to RWA’s are not available as Input Tax Credit in the hands of the RWA’s. Therefore RWA’s are inclined to charge GST on the subscription amounts.
This article is an attempt to analyse whether the collection of GST on monthly subscriptions which are below Rs 7,500 per month is permissible under the legal framework. This article pulls apart the various clauses of Notification 12/2017 – Central Tax (Rate) and the Central Goods and Services Tax Act 2017 in an attempt to solve this question with the right proceedings.
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