GST on Sinking Fund Collected by RWA Society

[deepak gulati]

Sir,

In case of a residential housing society, they are collecting Sinking Fund & Major Repair Maintenance Fund (MRF) on quarterly basis from its members.

Now the question is whether these Sinking Fund & MRF Fund will be included while calculating ₹ 7,500/- exemption limit for charging GST on monthly contribution from members for common use.

Thanks & Regards

[KASTURI SETHI]

Dear Querist,

Your query is replied in the following decisions of AAR and upheld by AAAR. go through both, especially highlighted portion of decision of AAR, Karnataka

Affirmed in 2020 (34) GSTL 360 (App. A.A.R. - GST - Karnataka) = 2020 (2) TMI 435 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA

2020 (32) G.S.T.L. 462 (A.A.R. - GST - Kar.) = 2019 (11) TMI 155 - AUTHORITY FOR ADVANCE RULING, KARNATAKA IN RE : VAISHNAVI SPLENDOUR HOME OWNERS WELFARE ASSOCIATION

AI Summary

GST exemption threshold: whether sinking fund and major repair fund contributions count toward members' taxable contribution limit.
Whether contributions for a Sinking Fund and Major Repair Fund collected by a residential welfare association are includible in the GST exemption threshold for members' periodic common-area contributions; adviser refers to Karnataka AAR and AAAR decisions as guidance and provides citations for examination.