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2024 (8) TMI 1374 - AAR - GSTApplicability of Serial No 77 of the N/N. 12/2017 - such members of RWA (unincorporated body) whose share of contribution is less than Rs. 7,500 per month and whereas the monthly maintenance (share of contribution) of other members of the same RWA are more than Rs. 7,500/- - chargeability of GST - HELD THAT - The benefit of exemption as allowed vide serial no 77 of the N/N. 12/2017 Central Tax (Rate) dated 28.06.2017, as amended, is entirely member specific meaning thereby if a RWA collects up to an amount of Rs. 7500/- per month from a member by way of reimbursement of charges or share of contribution, the RWA shall not be liable to pay tax on such amount irrespective of the fact that there may be other members (even from the same person if he owns another flat in the same housing society or residential complex) in respect of whom such quantum exceeds Rs. 7500/- per month. To illustrate, if a RWA who is registered under the GST Act, collects Rs. 7000/- per month as maintenance charges from one of its member and Rs.9000/- from another member in the same residential complex, the RWA shall not be liable to pay tax on Rs. 7000/-. The applicant shall not be liable to pay tax on the amount which is collected from its members by way of reimbursement of charges or share of contribution where such amount does not exceed Rs. 7500/- per month per member.
Issues:
Determining the taxability of supply of services by a Residential Welfare Association (RWA) to its members whose monthly subscription doesn't exceed Rs. 7500/- per month, considering the RWA also collects monthly subscription exceeding Rs. 7500/- from other members. Analysis: The applicant, a Residential Welfare Association (RWA), sought an advance ruling under the GST Act regarding the applicability of Notification No. 12/2017 on its members' monthly contributions. The RWA provides services by way of reimbursement of charges or share of contribution for goods and services procured from a third party. The applicant questioned whether GST should be charged from all members or only from those whose monthly contributions exceed Rs. 7,500, despite the RWA's annual turnover being over Rs. 20 lakhs. The questions raised fall under clause (b) of sub-section (2) of section 97 of the GST Act, and as they were not previously decided by any authority, the application was admitted. The applicant argued that the notification did not specify the chargeability of GST from members whose monthly contributions were less than Rs. 7,500, while others contributed more. The Revenue did not provide any view on the issue raised by the applicant. The Authority observed that the applicant's questions could be summarized into a single issue: determining the taxability of services provided by the RWA to members based on their monthly subscriptions. The Authority referred to Circular No. 109/28/2019-GST, which clarified that services provided by an RWA up to Rs. 7,500 per month per member for common use are exempt from GST. The Authority further clarified that the exemption is member-specific, meaning if the RWA collects up to Rs. 7,500 per month from a member, it is not liable to pay tax on that amount, even if other members contribute more. The ruling stated that the applicant would not be liable to pay tax on amounts collected from members if they do not exceed Rs. 7,500 per month per member. This ruling aligns with the provisions of the GST Act and the exemption criteria specified in Notification No. 12/2017.
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