This circular provides clarification on various issues relating to GST on monthly subscription or maintenance charges collected by Residential Welfare Associations (RWAs) from their members for providing common services and facilities in housing societies or residential complexes.

The circular clarifies that services provided by an RWA to its own members by way of reimbursement of charges or contribution are exempt from GST up to ₹7,500 per month per member. This exemption limit was earlier ₹5,000 per month per member and was enhanced to ₹7,500 with effect from 25 January 2018. If the monthly maintenance charge does not exceed this limit, no GST is payable.

It is further clarified that an RWA is not required to obtain GST registration or pay GST if its aggregate annual turnover does not exceed ₹20 lakh, even if the monthly contribution per member exceeds ₹7,500. GST liability arises only when both conditions are met, namely, the monthly maintenance charge exceeds ₹7,500 per member and the annual aggregate turnover of the RWA exceeds ₹20 lakh.

Where maintenance charges exceed ₹7,500 per month per member and GST is applicable, tax is payable on the entire amount and not merely on the amount exceeding ₹7,500. RWAs charging GST are entitled to claim input tax credit on goods and services used for providing taxable supplies, such as maintenance services and common facilities.

The circular also clarifies that where a person owns more than one residential unit, the exemption limit of ₹7,500 per month applies separately to each unit.

These clarifications aim to ensure uniformity and remove doubts regarding GST treatment of RWA maintenance charges.