18/04/2025
Clarification on GST Applicability for RWAs and Apartment Owners
The Ministry of Finance has issued an important clarification addressing confusion over GST applicability on maintenance charges levied by Resident Welfare Associations (RWAs), especially after recent media reports.
Key Points:
GST Registration Not Required: If the aggregate turnover of an RWA is below Rs. 20 lakh in a financial year, GST registration and payment are not required — even if the monthly maintenance exceeds Rs. 7,500 per member.
GST Applicability: GST @18% becomes applicable only when both conditions are met:
1. Monthly maintenance exceeds Rs. 7,500 per member, and
2. Aggregate turnover of RWA is Rs. 20 lakh or more in the financial year.
Multiple Flats: The Rs. 7,500 threshold is applied separately for each apartment owned by a member.
Full Taxation Beyond Limit: If charges exceed Rs. 7,500 (e.g., Rs. 9,000), then GST is levied on the entire amount, not just on the excess.
ITC Benefit Under GST: Unlike the pre-GST era, RWAs can now avail Input Tax Credit (ITC) on capital goods, goods, and input services, effectively reducing their tax burden.
This clarification is a welcome move to eliminate ambiguity and ensure better compliance in housing societies.
— in Patna.
