24 Jul 2019Posted By: Mudit Handa


Government exempts RWA from GST Liability

Everyone knows that the GST regime has made businesses smoother and more compliant than ever before. It has eased the business by making the compliances much more convenient.

The GST council has given some relaxations to certain types of organization.

Recently, the GST department has exempted the Residents Welfare Association (RWA) from the requirement of GST registration and payment of GST liability. 

 

1. What exemption has been granted to RWA?

The Central Board of Indirect taxes and Customs (CBIC) has notified that if the annual turnover of Residents Welfare Association (RWA) is not more than 20 lacs in the previous year, then GST is not payable by the concerned RWA. The GST liability shall not arise even if the monthly contribution by the residents goes beyond 7,500/-

Here is the 

However, GST liability shall arise if the annual turnover exceeds 20 Lacs and the contribution by the members also exceeds 7,500/-.


2. Why RWA has been exempted from GST liability?

Recently, many issues were raised related to GST payable on the maintenance charged by RWA for providing goods & services to the residents of a housing society or residential complex. These issues were thoroughly examined and CBIC decided to exempt RWA from GST liability.


3. Whether maintenance charges to RWA exempt from GST?

The maintenance charges paid by residents to RWA supply of service from RWA are exempt from GST. 

However, there is an upper limit of the maintenance charges, i.e. 7500 per month per member, which is exempt from GST liability.


4. When is GST registration mandatory for RWA?

If the aggregate turnover of RWA exceeds 20 Lakh in a financial year, it shall be required to take GST registration. 


5. When is GST liability applicable on RWA?

RWA shall be required to pay GST on the monthly maintenance or contribution charged from its members, only if:

  • The maintenance is above 7500/- per month per member and 
  • The annual aggregate turnover of RWA is 20 lakhs or above, i.e. if it has GST registration.

These are the new relaxed GST norms for the RWA and the residents.

 

In case you need any sort of guidance in respect of GST registration, please feel free to contact our business advisor at 8881-069-069.

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