GST EXEMPTION NOT AVAILABLE IF MONTHLY SOCIETY MAINTENANCE CHARGES EXCEEDS INR 7500/- : GST AAR WEST BENGAL

GST EXEMPTION NOT AVAILABLE IF MONTHLY SOCIETY MAINTENANCE CHARGES EXCEEDS INR 7500/- : GST AAR WEST BENGAL

WEST BENGAL AUTHORITY FOR ADVANCE RULING GOODS AND SERVICES TAX

Case Name: Prinsep Association of Apartment Owners (GST AAR West Bengal)

Advance Ruling No. Order Number 22/WBAAR/2023-24

Date of Judgement/Order: – 29th November 2023

RULING

 Question 1: Where monthly contribution charged to a member exceeds INR 7500 per month, whether the applicant can avail the benefit of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 (Sl. No. 77) read with Notification No. 02/2018 dated 25.01.2018 which provide for exempting from tax, the value of supply up to an amount of Rs. 7,500/- per month per member? In other words, whether tax would be charged over and above INR 7500 or the total amount collected from members.

Answer: The exemption is not available when the maintenance charges exceed Rs. 7,500/- per month per member. Where the charges exceed Rs. 7500/- per month per member, the entire amount is taxable.

Question 2: Whether the applicant is liable to pay CGST/SGST on amounts which it collects from its members for setting up a corpus fund for future contingencies/ major CAPEX. Whether such fund from members will come under the definition of supply and liable to be taxed ?

Answer: The amount collected by the applicant from its members for setting up a sinking fund is an advance payment towards future supply of services and the applicant is, therefore, liable to pay tax on such supply.

Question 3: Whether the applicant is liable to pay CGST/SGST on collection of common area electricity charges paid by the members and the same is recovered on the actual electricity charges?

 Answer: Amount collected on account of common area electricity charges, being a part of composite supply, is taxable in cases where the supply of common area maintenance services as provided by the applicant fails to qualify for exemption under serial number 77 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, as amended.