Resident Welfare Associations are very common in metropolitan cities of India like Delhi, Mumbai, Kolkata, Chennai etc. With the roll out of GST in India, the residents are running around to Consultants, Advisers and to their Society’s Chairman for clarification of the law. Here we present the basic questions and their answers as our step towards awareness of such residents and the associations.
The article discusses the RWA GST implications in the question-answer form for the simplicity of the provisions.
1.Are the residents of RWA need to pay GST on the maintenance charges paid by them?
The answer is conditional. One has to check the dual condition on the RWA as follows:-
a. Contribution per member > INR 5000 pm; AND
b. Annual Turnover RWA > 20 lakh
If both the above conditions satisfies then the GST @ 18% shall be applicable on such contribution. However, in absence of even a single condition, the GST need not be charged.
2. Whether RWA needs to get registered under if:
a. The Consolidated Income of RWA including income from other sources like advertising, Income from sale of scrap etc exceeds INR 20 lakhs but income from members only does not exceed INR 20 lakhs?
The answer is YES since, the law talks about aggregate turnover of the RWA and such aggregate turnover includes turnover (income) from all sources whatsoever.
b. Consolidated Income from members and others does not exceed INR 20 Lakh?
No registration required in this case subject to general conditions like No Interstate Supply, No Inward supplies attracting Reverse Charge Payments etc.
3. Who shall sign the registration application for RWA and also the subsequent returns?
Any person as authorized by RWA at the time of seeking registration under GST.
4. Is it mandatory to have DSC for registration and filing returns?
DSC is mandatory for enrollment by Companies, Foreign Companies, Limited Liability Partnership (LLPs) and Foreign Limited Liability Partnership (FLLPs). For other taxpayers, DSC is optional.
5. Whether the authorized person details as registered at GST portal can be amended subsequently on change in office bearers?
Yes, it could be changed.
6. Can the RWA take input tax credit of GST paid on goods and services received?
Yes subject to general conditions for not availing ITC as below:
a. Such Input services are exclusively used to provide taxable outward supplies; and
b. Such services are used in the course of or furtherance of business; and
c. Such services are not disallowed under section 17(5) of CGST Act viz a viz:
- Motor vehicles and conveyances except when used for transportation of goods
- Food and beverages
- Outdoor catering
- Membership in a club, health, fitness center
- Health insurance and life insurance (except where Government makes it obligatory)
- Travel benefits extended to employees on vacation such as leave or home travel concession
- Works contract service for construction of an immovable property (except plant & machinery)
- Goods and/or services used for personal use
- Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples
However, In case of common credits for taxable and exempt supplies, the credit needs to be identified and reversed for the exempt portion in the manner as specified in the law.
7. What documentations are required to be maintained under GST for inputs and outward supply?
|Account/ Records||Information Required|
|Purchase Register||All the purchases made within a tax period for provision of services|
|Sales Register||Account of all the sales made within a tax period must be maintained|
|Input Tax Credit Availed||This register should maintain the details of Input Tax Credit availed for a given tax period|
|Output Tax Liability||This register should maintain the details of GST liability outstanding to be adjusted against input credit or paid out directly|
|Output Tax Paid||This register should maintain the details of GST paid for a particular tax period|
|Other Records Specified||Government can further specify by way of a notification, additional records and accounts to be maintained|
8. Whether GST is payable under Reverse Charge Mechanism on goods and services received by RWA:-
In case RWA are registered under GST?
In case RWA are not registered under GST?
Registration is mandatory in case any supply attracting reverse charge GST payment is consumed.
List of such supplies along with the status of supply recipient and supply provider is provided below:-
|Service||Provider of service||Recipient of Service||Percentage of
service tax payable by any person other than the service provider
|1.||Taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory other than non-assessee online recipient||Any person
who is located in a non- taxable territory
|Any person located in the
taxable territory other than non-assessee online recipient (Business Recipient)
|2.||Services provided or agreed to
be provided by a goods transport agency (GTA) in
respect of transportation of goods by road
Transport Agency (GTA)
|(a) any factory registered under or governed by the Factories Act, 1948;
(b) any society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India;
(c) any co-operative society
established by or under any law;
(d) any person registered under CGST/SGST/UTGST Act;
(e) any body corporate established, by or under any law; or
(f) any partnership firm whether
registered or not under any law including AOP
(g) Casual taxable person
|3.||Service provided or agreed to be provided by an individual advocate or firm of advocates by way of legal services, directly or indirectly||An individual advocate or Firm of Advocates||Any business entity.||100%|
|4.||Services provided or agreed to be provided by anarbitral tribunal||An arbitral Tribunal||Any business entity.||100%|
|5||Sponsorship services||Any person||Any body corporate or partnership firm.||100%|
|6||Services provided or agreed to be provided by Government or local authority excluding, –
(1) renting of immovable property, and
(2) services specified below-
(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;
(ii) services in relation to anaircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) transport of goods or passengers.
|Government or local
|Any business entity.||100%|
|7.||Services provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate;||A director of a company or a body corporate||A company or a body corporate.||100%|
|8.||Services provided or agreed to be provided by an insurance agent to any person carrying on insurance business||An nsurance
|Any person carrying on
|9.||Services provided or agreed to be provided by a recovery agent to a banking company or a financial institution or a non-banking financial company||A recovery
|A banking company or a financial institution or a non- banking financial company.||100%|
|10.||Services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India||A person
located in non-taxable territory to a person located in non-taxable territory
|Importer as defined under clause (26) of section 2 of the Customs Act, 1962.||100%|
|11.||Transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works||Author or
music composer, photographer, artist, etc.
|Publisher, Music company, Producer||100%|
|12.||Radio taxi or Passenger Transport Services provided through electronic commerce operator||Taxi driver or
Rent a cab operator
|Any person||100% by
Electronic Commerce Operator
9. What types of returns and forms are required to be filled and periodicity of the same?
|Return/ Compliance||What is to be file||By When it is to be filed|
|REG 01||Application for Registration||Within 3 month of appointed date|
|TRANS-1||Details of Stock in hand, ITC available in return||Within 90 day of appointed day|
|GSTR-1||Details of outward supplies of taxable goods and/or services effected||10th of the next month|
|GSTR-2||Details of inward supplies of taxable goods and/or services effected claiming input tax credit.||15th of the next month|
|GSTR-3||Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax.||20th of the next month|
|GSTR-9||Annual Return||31st December of next financial year|
*Exception for July and Aug 2017:
|GSTR 1||September 10th 2017||October 5th 2017|
|GSTR 2||September 25th 2017||October 10th 2017|
|GSTR 3||September 30th 2017||October 15th 2017|
|GSTR 3B||August 25th 2017||September 20th 2017|
10. Is it mandatory to have some software to file periodic returns or it can be filled manually?
It could be filed manually but online only. However an offline utility is also provided by the government but the same will have to be uploaded online as well.
11. Is it mandatory to raise invoice for taxable and non-taxable supplies?
For Taxable – Yes, Tax Invoice;
For Exempt – Yes, Bill of supply.
12. What is the specimen format of Invoice under GST?
No format prescribed, however fields are notified which shall be present in the invoice as given below:
A tax invoice issued by the supplier shall contain the following details:
- Name, address and GSTIN of the supplier
- A consecutive serial number containing only alphabets and/or numerals, unique for a FY not exceeding sixteen characters
- Date of its issue
- If recipient is registered, Name, address and GSTIN/ Unique ID Number, of the recipient
- If recipient is unregistered and taxable value > INR 50000 then tax invoice should contain the following details:
- name and address of the recipient and the address of delivery
- the name of State and its code
- If recipient is unregistered and taxable value < INR 50000 then tax invoice should contain the following details, if the recipient so requires:
- Name and address of the recipient and the address of delivery
- Name of the state and its code
- HSN code of goods and services
- Description of goods OR services
- Quantity and unique quantity code of goods,
- Total value of supply goods OR services OR both,
- Taxable value of goods OR services OR both taking into account discount or abatement, if any.
- Rate of tax (CGST, SGST/SGST or IGST),
- Amount of tax charged in respect of taxable goods OR services (CGST, SGST/SGST or IGST),
- Place of supply along with the name of the state, in the case of a supply in the inter-state trade or commerce,
- Address of delivery where the same is different than the place of supply,
- Whether the tax is payable on reverse charge basis, and
- Signature or digital signature of the supplier or his authorized representative.
13. Whether taxable and non-taxable invoices needs to be uploaded at GST portal and in which format?
The invoices need not be uploaded anywhere however, their details would be entered in GST return invoice wise.
14. How to judge applicability of IGST / CGST / SGST on various supplies made by RWA?
Place of supply provisions to be referred.
Services in relation to immovable property
Place of supply = place of immovable property located therefore, CGST+SGST
For sale of scrap / goods
Place of supply = movement of goods terminated. Therefore, Interstate (IGST), Intra state (CGST+SGST).
For any other service not related to immovable property and not covered under any exception, the place of supply shall be the location of the recipient of service.
Wherever Interstate supply determined, the IGST has to be charged otherwise CGST + SGST has to be charged.
15. What is the mechanism of set-off of IGST / CGST / SGST credit?
16. What is the time and mode of payment of GST?
20th of subsequent month. Online payment through GST portal.
17. For how many years such records needs to be preserved?
As per the GST law every registered taxable person required to keep and maintain books of account or other records will maintain the books for at least 60 months, counted from the last date of filing of Annual Return.
This article is intended to discuss the understanding of the author with the readers. This shall not be treated as a legal opinion or any sort of consultancy at all.