1. GST impact on housing societies: RWA services not under new tax regimes, clarifies Centre

GST impact on housing societies: RWA services not under new tax regimes, clarifies Centre

GST impact on housing societies: Centre today refuted media reports that under the recently launched Goods and services (GST), service provided by housing societies will become costlier.

By: | New Delhi | Published: July 13, 2017 8:13 PM
GST, RWA, Centre, VAT, Central Excise GST impact on housing societies: In case the aggregate turnover of an RWA is Rs 20,00,000 in a financial year, then such supplies would be exempted from GST.

GST impact on housing societies: Centre today refuted media reports that under the recently launched Goods and services (GST), service provided by housing societies will become costlier. In a press release, the government called this as ‘completely unsubstantiated’. It added that the supply of services by Residents Welfare Association (RWA) to its members through reimbursements or share of contribution up to Rs 5,000 for members per month and goods for the common use of all members in a housing society have been excluded from GST.

The notification further said that in case the aggregate turnover of an RWA is Rs 20,00,000 in a financial year, then such supplies would be exempted from GST, even when charges per member are more than Rs five thousand. The tax burden on RWAs will be lower under the GST since they would now be entitled to ITC in respect of taxes paid by them on capital goods like water pumps, generators, lawn furniture etc and input repair and maintenance services. The ITC of VAT and Central Excise on goods and capital goods was not there in the pre-GST period and these were part of the cost to the RWA. Therefore no change has been made to services provided by the RWA) for its members after GST came it being, the release added.

In the meantime, Ludhiana in Punjab has witnessed the dip in production after GST came into being, Indian Express said. Even as several industrial groups are seeking clarifications on the new tax, several others are demanding deemed input tax credit on old stock. “We are running our units on a single shift and are not doing any overtime as a number of clients whom we have to supply material, have no GST number. It is the same problem with the persons who supply us raw material. So business is being done in a restricted manner,” Avtar Singh, President of Chamber of Industrial and Commercial Undertakings (CICU), was quoted as saying by the paper.

  1. Swaminathan Venkataraman
    Sep 24, 2017 at 10:36 am
    FOR an UPDATE: s: facebook /swaminathanv3/posts/1445208175555464
    Reply
    1. Swaminathan Venkataraman
      Sep 22, 2017 at 3:01 pm
      The points covered herein, - under the guise of bringing clarity in regard to or setting at rest the concern of the impacted housing complexes /its members,- as critically viewed, have gone on at a tangent, dubiously so. For, the real concern, behind the ongoing agitation against the propriety of the levy itself, is grounded on the well- settled and - accepted legal 'principle of mutuality'. And, according to a view , being canvassed in enlightened knowledgeable circles, though logically sound, that principle has been given to the winds, by the Revenue, in persisting in its adverse / unsustainable stance, to the discomfort of the impacted section of the public.
      Reply
      1. M
        M R Jethwani
        Sep 2, 2017 at 6:09 pm
        The basic question is whether the C H Societies are in the activity of business ? So why GST should be applicable. ?. The other question is that the criteria for claiming Input Tax Credit is that the expenditure should be for the furtherance of business. What furtherance of business the C H Society is conducting ? Apart from above how can any registered en y be asked to be pay GST for an unregistered en y under reverse charge mechanism when the en y itself is exempted from registration and payment. Whereas Liability for GST can be shifted, taxability cannot be shifted. This will certainly result in litigation.
        Reply
        1. Rajesh J Kothari
          Aug 7, 2017 at 5:31 pm
          This press release is a cruel joke on hapless co-operative housing societies where member collection is more than 5,000 per month and aggregate collection is more than 20 lakhs per year. Which housing society buys water pumps, generators, lawn furniture etc ? as mentioned in the press release. Problem with babus is that they have never lived in a co-op housing society and do NOT know how and under what limitations they function. While it is true that such societies will get input tax credit on goods and services but are CHS ready with qualified accountants to do the paper work? Absolutely no. Also, it is wrong to tax members as Service tax tribunal, Mumbai in Feb 2015 ruled that member services are not taxable. s: rjkothari. /2017/07/hapless-co-operative-housing-society
          Reply

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