Housing Societies Exempt from GST on Monthly Collections Under Rs.7500 Per Member Despite High Annual Turnover

The Authority ruled that GST is not applicable on monthly collections not exceeding Rs.7500 per member, even if the society's annual turnover exceeds Rs.20 lakhs. However, GST at 18% applies when the combined monthly maintenance and sinking fund exceeds Rs.7500 per member, with tax levied on the entire amount, not just the excess. The Authority clarified that common area electricity charges collected along with maintenance fees are exempt from GST, as these represent recovery of actual costs incurred by the RWA on behalf of members.

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Issues:
1. Applicability of GST on monthly collection not exceeding Rs.7500 per member in a society with total collections exceeding Rs.20 lakhs a year.
2. Applicability of GST on total monthly maintenance plus annual sinking fund collected when it exceeds Rs.7500 per member.
3. Applicability of GST on monthly collection of common area electricity charges in addition to monthly maintenance.

Analysis:
1. The Resident Welfare Association (RWA) sought clarification on the GST applicability for various collections. The ruling clarified that if the maintenance charges per member exceed Rs.7500 and the aggregate turnover surpasses Rs.20 lakhs, GST at 18% is levied on the entire amount, not just the difference. However, if the monthly charge per member is Rs.7500 or less, no tax is applicable even if the annual turnover exceeds Rs.20 lakhs.

2. The ruling further explained that any amounts collected periodically along with the monthly maintenance charges are taxable if the total exceeds Rs.7500 per member. Thus, the total amount collected in a month, including sinking fund, is liable to GST if it surpasses Rs.7500. However, GST is not imposed on electricity and water charges collected from residents.

3. The Authority's decision on the three questions raised by the RWA are as follows:
- On the first question regarding monthly collection not exceeding Rs.7500 per member, the ruling is "No."
- On the second question about the applicability of GST on total monthly maintenance plus annual sinking fund exceeding Rs.7500 per member, the ruling is "Yes."
- On the third question concerning the monthly collection of common area electricity charges in addition to the monthly maintenance, the ruling is "No."

This detailed analysis provides a comprehensive understanding of the judgment, addressing each issue raised by the RWA and the corresponding rulings provided by the Advance Ruling Authority.

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