GST Payable on Corpus fund Collection by Residence Association at the Time of Receipt of Fund: AAR treats it as ‘Advances for Future Supply’ [Read Order]
The applicant contended that the amounts collected from members should be treated as part of monthly maintenance charges and should be eligible for exemption if the total amount remains within the threshold limit.
![GST Payable on Corpus fund Collection by Residence Association at the Time of Receipt of Fund: AAR treats it as ‘Advances for Future Supply’ [Read Order]](https://images.taxscan.in/h-upload/2026/04/24/2134416-gst-payable-on-corpus-fund-collectiongst-payable-on-corpus-fund-collectionjpg.webp "GST Payable on Corpus fund Collection by Residence Association at the Time of Receipt of Fund: AAR treats it as ‘Advances for Future Supply’ [Read Order]")
The Authority for Advance Ruling (AAR) in Karnataka held that Goods and Service Tax (GST) would be payable on the corpus fund collection by Residence Welfare Association (RWA) at the time of receipt of the fund. The AAR mentioned it should be treated as ‘advances for future supply’. The applicant, M/s Sandeep Vihar Owners Association, is an Apartment Owner’s Association...
The Authority for Advance Ruling (AAR) in Karnataka held that Goods and Service Tax (GST) would be payable on the corpus fund collection by Residence Welfare Association (RWA) at the time of receipt of the fund. The AAR mentioned it should be treated as ‘advances for future supply’.
The applicant, M/s Sandeep Vihar Owners Association, is an Apartment Owner’s Association duly registered under the Karnataka Societies Registration Act, 1960. The applicant is responsible for the security, housekeeping, and overall maintenance of the complex, including waste management, essential services, and the supply of potable water.
The issues included whether the applicant would be liable to pay GST on amounts which it collected from RWA’s members towards a corpus fund for future contingencies. If yes, then whether it is subject to GST at the time of collection or at the time of actual utilization for capital expenditure.
The applicant referred to Section 7(1)(a) of the CGST Act, 2017 and contended that the amounts collected from members should be treated as part of monthly maintenance charges and should be eligible for exemption if the total amount remains within the threshold limit specified under Notification No. 12/2017 - State Tax (Rate) dated 30.06.2017. AAR held that GST would be payable at the time of collection of the corpus fund, and time-of-supply provisions under Section 13 of the CGST Act applies to corpus fund collections treated as advances.
In light of the abovementioned, the Authority passed the following Ruling. The two member bench of Kalyanam Rajesh Rama Rao and Sivakumar S Itagi held that such collections are to be treated as advances for future supply and GST is payable at the time of receipt of the corpus fund, as per the provisions of Section 13(2)(a) of the CGST Act which defines the time of supply as the receipt of advance amounts.
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