A Cooperative Housing Society or a resident welfare association (RWA) will be required to pay GST on monthly subscriptions or contributions charged to its members if the payment received is more than Rs 5,000 per member and the society’s or RWA’s yearly turnover by supplying services and goods is more than Rs 20 lakhs. 

The applicability of GST for residents of Housing Societies and Resident Welfare Associations has been changed, according to the most recent notifications of July 22, 2019. The GST will be applied to the total amount if the payment is more than Rs.7500 per member and the Welfare Association’s annual revenue is more than Rs.25 lakhs.

Resident Welfare Associations are subject to the GST

Housing societies and resident welfare organizations with annual revenue of more than Rs.20 lakhs will be required to comply with GST requirements and register for GST. The services supplied by a Housing Society or a Resident Welfare Association are taxable under GST since they are considered a supply.

Parts of Housing Society Income that are Taxable and Non-Taxable Under GST

Not all charges or supplies made by a housing society would be taxable. Housing societies, for example, collect and remit property taxes on behalf of their members. The property tax collected and remitted would be exempt from the GST.

Maintenance and repair costs, on the other hand, will be taxed. Parking fees, as well as fees for the pool, clubhouse, and other amenities, would be taxable. Sinking funds, repair funds, and painting funds are all non-taxable.

Credit for Inputs

Housing societies will be allowed to offset their tax liability by claiming input tax credit on certain expenses incurred on behalf of residents for property care. The following sorts of expenditures incurred by the housing society or resident welfare organization, however, will not be eligible for an input tax credit.

• Expenses for electricity
• Duty on Stamps
• Taxes on property investment

Housing Societies Invoice Format

Housing societies would have to adapt their invoice format as a result of the application of GST. Because the nature of a housing society’s or resident welfare association’s supply is intra-state, only the CGST and SGST will apply.

Housing Societies Benefits from GST Compliance

Most housing societies should obtain a GSTIN and register with the government. By claiming the input tax credit, society will be able to lower its costs. In addition, if there is no production liability, GST is levied by suppliers for services such as housekeeping, repairs, maintenance, lift AMC (Annual Maintenance Contract), fire AMC, security, contract employees, accounting, and auditing services, and others can be claimed as a refund.