Case Of: Fortune Estates Association of Apartment Owners
Issued By: West Bengal AAR
Order No: WBAAR 04 of 2024
Date: 29th July 2024
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The Fortune Estates Association of Apartment Owners (applicant) sought an Advance Ruling regarding GST implications for monthly membership fees collected from its members.
The Applicant operates as a Residential Welfare Association (RWA) providing various services to its residents. The association incurs costs for these services through third party vendors and seeks to recover these costs via member contributions.
Fortune Estates aimed to ascertain whether the monthly contributions, being below the ₹7,500 threshold, would exempt the RWA from GST liabilities under the existing regulatory framework especially the applicability of Notification No. 12/2017-CT(R).
The AAR referred to Circular No. 109/28/2019-GST, which clarifies that the GST exemption applies specifically to individual contributions. This means that if a
member pays less than ₹7,500, that amount is exempt from GST.
In instances where a member’s contribution exceeds the ₹7,500 limit, the RWA must remit GST on the excess amount. This delineation ensures compliance
with GST regulations while safeguarding lower contributions from tax burdens.
The AAR ruled that for contributions under ₹7,500 per member per month, the RWA is exempt from GST obligations.