In a set of Frequently Asked Questions (FAQs), the Central Board of Excise and Customs (CBEC) clarified that Goods and Services Tax (GST) will not be levied on reimbursement of charges or share of contribution up to an amount of Rs. 5000/- per month per member for sourcing of goods or services from a third person for the common use.
“Reimbursement of charges or share of contribution up to an amount of Rs. 5000/- per month per member for sourcing of goods or services from a third person for the common use is not liable to GST. However, if the Cooperative society/ RWAs provide specific services of its own to its members or to any third party (e.g. use of community hall for social function by a non-member) cumulatively exceeds the threshold limit as per GST, then GST is leviable on such supply of services,” it said.
It also clarified that Property Tax, Water Tax, if collected by the RWA/Co-operative Society on behalf of the MCGM from individual flat owners, then GST is not leviable as the services provided by the Central Government, State Government, Union territory or local authority to a person other than business entity, is exempted from GST.
About the tax liability on maintenance charges up to Rs. 5,000/-, it clarified that “this is applicable to only the reimbursements of charges or share of up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members. Here, charges mean the individual contributions made by members of the society to avail services or goods by the society from a third party for common use.”
Read the Full Text of the FAQs Below
