Saturday, July 27, 2019

Flat owners to pay 18% GST on the entire maintenance charge


The  concept of levying all services  under the GST to generate maximum revenue for Government with exception to threshold limit 

In GST the threshold limit  for each such activity is  key parameters to decide whether the exemption available or coming under ambit of  GST 

In  case of Flat owners, there are more clarity required from Government side.
Recently the Tamil Nadu Authority for Advance Ruling (AAR) had recently issued a notification on the lack of clarity about the amount on which GST (Goods and Service Tax) applicable on maintenance charges

The clarification of maintenance charges exceeds Rs.7500  what will be  GST rate.
The AAR  has clarified that  GST will be applicable on the entire not on the difference amount   For example,  if the maintenance charges will be  Rs.12000  then the GST will be payable on Rs.12000 not on the difference amount  Rs.12000 -  Rs.7500 

If the annual aggregate turnover doesn’t exceed Rs.20 lakhs then GST will be exempted
The  Residents’ welfare association has to pay GST only satisfaction of both the conditions
         1 Annual aggregate turnover is more than Rs.20 lakhs
          2 Monthly maintenance charges exceed Rs.7500 

Another clarification came if  a person is having  two units in single apartments then the ceiling of 7500 per month per member will be applied separately for each residential apartment.

The Input tax for the Resident welfare association will be available for tax paid on goods and services  from them  Example Generators, sanitary hardware fittings,  repair and maintenance charges etc


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