Our RWA is registered body having about 90 owners since 3 years , and we have been paying maintenance per flat @90,000/- p.a since two years with a break up of maintenance in two accounts to avoid GST. With advance ruling in 2019 , we have decided further to reduce the maintenance from 90k to 80k and collect some additional amount of 90lacs as addl corpus fund so that we can avoid GST registration, but few members objected this and were quoting the following reasons . 1) expemption of GST for less then 7500/- pm should include , late fees, generator expenses and gas supply , if we add any two of this our contribution will be more then 7500/- 2) there is a new block with 12 apartments whose maintenance will be close to 1.5 lacs per annum , and 4 of them registered the property and paid advance annual maintenance along with corpus totaling to 5 lacs per flat in last and this fiscal . The same is mentioned in sale deed and it is registered 3) we are proposing to refund this to the new owners till the time they become members of association , is it legal to do so , 4) Is above approach of reducing maintenance and not/ separately collecting DG Charges , late fees, gas charges , avoiding GsT registration is legal and also by point 3 also
You should form separate cooperative housing society for each building
2) no need to refund corpus amount or advance maintenance paid by members
3) It is very difficult to make members agree to pay additional corpus amount
4) if members fail to pay maintenance on time you have to charge them interest for delayed payment otherwise no member will pay maintenance on time
5) you are at liberty not to charge for generator expenses , gas supply from flat owners
- As per law, maintenance charges paid by residents to the Resident Welfare Association are exempt up to Rs.7,500, and if the amount exceeds then GDT is chargeable on the entire amount charged.
- Further, the registration and charging of GST would not be required where the aggregate turnover exceeded Rs.20 lakh in a financial year, but the monthly maintenance charges were up to Rs.7,500 per member.
- Further , the Society is entitled to take input tax credit of Goods and Services Tax (GST) paid by them on capital goods i.e. generators, water pumps, lawn furniture etc. and goods like taps, pipes, other sanitary/hardware fillings etc.and input services such as repair and maintenance services.
- Hence, you can save after adopting the ways as you have mentioned .
1) RWA cam avoid to take late fees and gas charges as separate bill than it will be reduce your costing below 7500 rupees pm. If your society annual turnover is less than 20 lacs than 18% GST will not be applicable.
Actually you can save 18%GST by applying separate variable heading accounts and clearly maintenance will be for only garbage collector, security salary, water charges, common electricity bills.
1. 7500 is only maintenance benchmark above which gst is levied.
2. Ok
3. Yes but maintenance collected from old members can't be distributed to new members
4. it's illegal
Please reduce your maintenance bill below INR 5000/ per month, you may avoid to pay GST.
maintenance bill doesn't include property taxes, parking charges,healthcare maintenance and gymnasium.
In the name of avoiding the payment of GST charges to government you people are trying to do some gimmicks which may adversely impact your administrative steps with regard to the maintenance of the RWA.
In any case you may have to take a decision in the general meeting only and not individually or by a collective decision without a meeting .
A resolution may be passed in the general or a special meeting keeping this as agenda, discuss on the subject and propose the changes as desired by some members, if there is a resolution passed by the majority members, then it becomes law.
1. You are advised not to use such formula for calculation of Maintenance charges and payment of GST, more so specifically since it would be illegal & a prosecutable offence for evading GST having repercussions in terms of Interest & Penalty.
2. The above would be easily evident on GST Scrutiny of Society /Associations Balance Sheet, wherein it would be clearly seen that GST was not collected on specific services & amenities. There would be gross mismatch in the P&L in terms of differences between various receipts and payment of expenses and not collecting GST on various receipts.
What is EC is proposing this methods , and also conducted a Special meeting with less then 21 members physically presented total strength is 89 flats and also not following basic protocol of 14 days notice , agenda changes as back dated . The resolution of such special meeting can be accepted. Making a resolution to collect 30/- per sft addl corpus and reducing maintenance from 35/- per sft to 25/- per sft . Also no mention of DG charges, late fees and gas charges in GST preview , this was done to avoid GST registration ,
File a detailed complaint with dy registrar
You can complain to registrar against society failure to issue 14 day notice for AGM , fabricating agenda of meeting
in alternative file application before cooperative court to set aside resolution passed in AGM
Meeting is illegal. Please challenge it before Dy.registrar of Society.
If the resolution passed to effect the changes now made are3 illegal and not valid in law, you as a member issue a legal notice questioning the legal validity of the resolution passed by association without the support of majority members.
After that you can take legal steps as per law to get the resolution nullified.
- You should lodge a complaint before the Registrar for not adopting the rules of society , and to cancel the resolution passed in the said AGM.
1. Maintenance include all the charges such as late fees, DG charges and gas supply etc.
2. No need to refund the maintenance to owners who are not yet members of society.
3. Charges like late fees, DG charges, gas charges cannot be collected separately to avoid GST.
