Goods and Services Tax, also known as GST is the talk of the nation nowadays. GST is a tax applicable all over the nation which will flush out all the other taxes by the central and state governments. Every service in India will now have just one tax, which is the Goods and Service Tax.
Although, the services provided by housing societies Resident Welfare Association will increase its amount under Goods and Services Tax. The RWA will only pay the GST if the payment is more than INR 5,000 per person per month along with the goods for the common use of all the members in a housing society.
On July 8th, The Federation of Noida Residents Welfare Associations wrote to Mr. Arun Jaitley, Union Finance Minister requesting to exempt GST for RWAs. In case the total turnover of an RWA is INR 20 lakhs per year, then supplies will be exempted from GST even when charges per member are more than INR five thousand. The RWAs will pay the tax under Input Tax Credit for goods like water pumps, generators, maintenance services etc. The ITC of Value Added Tax on goods was not there before GST period and was part of the cost to the RWA.
The residents are now experiencing GST free RWAs as they do not carry any profit for any business or any activity and are solely formed by the residents and for the residents.