HI my building has around 34 flats and we are currently collecting 4500RS to 4700RS as maintenance and we registered under Karnataka Societies Registration Act (KSRA), 1960. We were planning to increase the maintenance to 5000RS to 5500RS for each flat but the total sum end of the Year will be above 20 lakh so what is the Tax implication on each member and the building. Also, what are other brackets apart from corpus we can park or collect fund for future building major maintenance?
Dear Sir,
There will be no GST liability on the same.
The RWA does not need to pay GST if the annual turnover is Rs 20 lakh or above, but the members are paying less than Rs 7,500 as maintenance charge per month each.
If members are paying more than Rs 7,500 as maintenance charge per month each then there will be GST liability on the same.
Hi,
As long as members are paying below 7500 rs as the maintenance charges, there is no GST Liability.
Since the members are paying in the range of 5000-5500, there is no GST Liability that should be collected from the members.
Even if the amount in total exceeds 20,00,000 for the RWS, they're not liable to pay GST.
Hello,
GST liability would arise if the maintenance subscription is more than ₹7,500 per member and the annual turnover of the society by way of supplying services and goods is ₹20 lakh or more. Since your society's maintenance is below Rs. 7500 limit, GST is not applicable.
Investment of funds would depend upon the duration for which funds need to be parked as an investment. For the maintenance of the premises on a regular basis, for payments to its employees and workers, costs of electricity and water, etc, funs can be parked in Liquid Funds could be accessed on notice of a couple of working day. While for meeting expenses which are not regular but usually needed after a few years like renovation, funds can be invested in FDs or fixed maturity plans (FMPs) from mutual funds with a higher return rate.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
As per recent notification issued, GST will be applicable only if maintenance charges per member is more than 7500. Hence in your case it is not liable to GST even If gross receipts exceeds rs 20 lakhs.
Earlier the limit was 5000 and from last year it has been increased to 7500. Therefore GST needs to be collected only if the amount from each flat each month is above ₹7500.
In your case since its below 7500 you dont have to worry.
With regard to invest you can invest in co operative bank since I think you are registered as co operative society and then the interest received from such bank is tax free in your hand.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
- As the subscription per member is less than Rs.7500 per month, no GST would be applicable even though receipts exceeds Rs.20 lacs.
- For future building major maintenance, collect the amount under Building Maintenance fund.
The amount up to INR 7500 is exempt from GST in case of contribution received for common maintenance received by RWA. You are not liable to pay GST if INR 7500 limit is maintained, even if total sum for the year exceed INR 20 Lacs.
Thanks
Hi,
Gst is not required as long as members are paying less than Rs 7,500 as maintenance charge per month.
You can collect the money for buidling development in a separate fund..may be building development fund.
