CHANGES FROM 25.1.2018 ABOUT GST ON RESIDENT WELFARE ASSOCIATIONS
The Goods and Services Tax Act, 2017 came into force in
India with effect from 1.7.2017.
The Finance Ministry in a statement
dated 13.7.2017 clarified that A Resident Welfare Association shall be required
to pay GST on monthly subscription or contributions charged (in the name of
maintenance and other charges) from its members if such subscription is more
than Rs. 5000.00 per member and the annual turnover of Resident Welfare
Association by way of supply of services and goods is also Rs. 20 Lakhs or more.
As per the above clarification if
subscription/contribution charged from its members above Rs. 5000.00 per month
from each member of the Association will have to pay service tax at the
applicable rates.
Now the Central Government has increased the
above subscription/contribution amount from Rs.5000.00 to Rs.7500.00 with
effect from 25.1.2018 which will attract GST at the applicable rates based on
the recommendations made by the GST Council in its 25th Meeting held on
18.1.2018. There is no change in the annual turnover of Resident Welfare
Associations by way of supplying of services and goods is Rs.20 Lakhs or more
which is taxable.
To view the earlier article click the link
given below:
https://abhivirthi.blogspot.com/2017/07/gst-on-resident-welfare-associations-in.html
https://abhivirthi.blogspot.com/2017/07/gst-on-resident-welfare-associations-in.html
The Press Release is given below for ready
reference:
Recommendations made by the GST Council in its 25th Meeting held on 18th January,
2018 at Delhi for granting relief from GST on services provided by Resident Welfare
Associations
to their members
In the meeting
held on 18th January, 2018, the GST Council has recommended several
measures granting relief from GST on a number of goods and services. One of the important reliefs granted by the Council is to enhance the limit of contribution made by members of a Resident
Welfare Association for
the purpose of exemption
from GST.
Services provided by Resident Welfare Associations (unincorporated body or a registered
non-profit entity) to their members were hitherto exempt against
contribution of up to an amount
of five thousand rupees per month per member. Requests were received from
several quarters to enhance
the contribution
limit of five
thousand rupees per month per member for exemption.
The Council has recommended that the limit may be enhanced to Rs 7500/- per month per member. As a result, RWAs shall be required to pay GST on monthly subscription/contribution charged from
its members if such subscription is more than Rs. 7500 per member and the annual turnover of
RWA
by way of supplying of services and goods is also Rs. 20 lakhs or more. Under GST, the tax burden on RWAs will be lower for the reason that they would now be entitled to ITC in respect of taxes paid by them on capital goods (generators, water pumps, lawn
furniture etc.), goods (taps, pipes, other
sanitary/hardware fillings etc.) and input services such as repair and maintenance services. ITC of Central Excise and VAT paid on goods
and capital goods was not available
in the pre-GST period
and these were
a cost to the
RWA.
The notifications giving effect to
the above recommendations of the Council
will come into force on 25th January, 2018. Accordingly, from 25 January 2018, the services provided by
Resident Welfare Association to its members against contribution of up to an amount of Rs 7500/- per month
per
member shall be
exempt.
.