Question
a) Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017 at sr.no.77 provides for the following exemption to housing societies - 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 in a housing society or a residential complex. Query : whether a person who paying maint. charges of rs 8000 per month to RWA ie to pay gst on 8000 or rs (8000-5000(now 7500). And also if the RWA is charging on its own ie not through third person should collect gst even if monthly maint. is below 7500. b)RWA is collecting charges with GST from its members on monthly basis but some members are not paying for the last 18 months and suddenly they come and make one time payment and amount is waived off. Query : that GST paid on monthly basis can be adjusted after issuing credit not, pl confirm. c)A tour operator has a customer who has booked a tour for mumbai and gujarat for hotel stay and local incursion query : tour operator is to charge 5% to the cutomer on total bill only when there is transport also included ie hotel stay+ local incursion+transport to the destinations and OTHERWISE 18% on hotel stay+ local incursion. Pl confirm the GST rate .Also since the customer is going to be at both places , then for 18% slab(without transportation) - tour operator has to take registration in both places ie mumbai and gujarat,
Answer
(a) Vide Notification no. 12/2017 Central Tax (Rate) s.no. 77 services provided by RWA are exempted as follows:
| 77 |
Heading 9995 |
Service by an unincorporated body
or a non- profit entity registered under any law for the time being in
force, to its own members by way of reimbursement of charges or share of
contribution ' (a) as a trade union; (b) for the provision of carrying out any activity which is exempt from the levy of Goods and service Tax; or (c) up to an amount of seven thousand five hundred rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex. |
Nil | Nil |
In view of above services by RWA are exempt only
if per member contribution is upto Rs 7500/- per month.
The intention of law maker here is to exempt contribution upto of Rs 7500/- per
member per month otherwise it was written in law that the societies who are
collecting contribution less than Rs 7500/- per member are exempt.
So in our opinion RWA is exempt upto contribution of Rs 7500/- and GST is
leviable on Rs 500/- i.e. (Rs 8000/- - Rs 7500/-).
But the Circular No. 175/1/2014-ST Dated 10/01/2014 under Service tax regime was
issued with different opinion. The relevant para of circular is reproduced
below:
| Sl. No. | Doubt | Clarification |
| 1 | (i) In a residential
complex, monthly contribution collected from members is used by the RWA
for the purpose of making payments to the third parties, in respect of
commonly used services or goods [Example: for providing security service
for the residential complex, maintenance or upkeep of common area and
common facilities like lift, water sump, health and fitness centre,
swimming pool, payment of electricity Bill for the common area and lift,
etc.]. Is service tax leviable' (ii) If the contribution of a member/s of a RWA exceeds five thousand rupees per month, how should the service tax liability be calculated' |
Exemption at Sl. No. 28 (c)
in notification No. 25/2012-ST is provided specifically with reference
to service provided by an unincorporated body or a non'profit entity
registered under any law for the time being in force such as RWAs, to
its own members. However, a monetary ceiling has been prescribed for this exemption, calculated in the form of five thousand rupees per month per member contribution to the RWA, for sourcing of goods or services from third person for the common use of its members. If per month per member contribution of any or some members of a RWA exceeds five thousand rupees, the entire contribution of such members whose per month contribution exceeds five thousand rupees would be ineligible for the exemption under the said notification. Service tax would then be leviable on the aggregate amount of monthly contribution of such members. |
The language of law in GST is same that was in
Service tax. The earlier content of Service tax Notification no. 25/2012 are
reproduced:
Service by an unincorporated body or a non- profit entity registered under any
law for the time being in force, to its own members by way of reimbursement of
charges or share of contribution -
(a) as a trade union;
(b) for the provision of carrying out any activity which is exempt from the levy
of service tax; or
(c) 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 in a
housing society or a residential complex
Since the interpretation of same provision was done under Circular No.
175/1/2014-ST Dated 10/01/2014 and it is safe side to go with it.
If you are ready for litigation we have different opinion as specified above.
Further if RWA is charging on its own and not through third person even then it
will be eligible for exemption upto contribution of Rs 7500/- per member. The
same is clarified through FAQ issued by CBIC reproduced below:
"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 Co-operative
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."
(b) As you have rightly paid liability on monthly basis as per the Time of
Supply (i.e date of Issue of Invoice ) and On Value calculated at the TOS as per
Section 15.
Waiver of Amount at the time of Lump sum payment for any reason is presumed as
Discount given after provision of service which is deducted from taxable value
only if the following condition specified in Section 15 (3) (b) are fulfilled :-
(i) such discount is established in terms of an agreement entered into at or
before the time of such supply and specifically linked to relevant invoices; and
(ii) input tax credit as is attributable to the discount on the basis of
document issued by the supplier has been reversed by the recipient of the
supply.
Therefore in your case if the condition relating to discount is given in by-laws
of society then it is deducted from taxable value and you can issue credit note
for the same.
However if the same is not given in by-laws credit note can not be issued in
this situation and the taxable value for the purpose of charging GST will
remains same.
(c) Tour operator services are covered under SAC code 9985 and the rate on such
service under GST as per Notification No. 11/2017-Central Tax (Rate) vide S.no
23 as Follows:-
| 23. Heading 9985 (Support services) | ||
| (i) Supply of
tour operators services. Explanation.- "tour operator" means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours. |
2.5
|
1. Provided
that credit of input tax charged on goods and services used in supplying
the service other than the input tax credit of input service in the same line of business (i.e. tour operator service procured from another tour operator)] has not been taken [Please refer to Explanation no. (iv)] 2. The bill issued for supply of this service indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour. |
| (ii) Services by way of house-keeping, such as plumbing, carpentering, etc. where the person supplying such service through electronic commerce operator is not liable for registration under sub-section (1) of section 22 of the Central Goods and Services Tax Act,2017. | 2.5 | Provided that
credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)]. |
| (iii) Support services other than (i) and (ii) above. | 9 |
(Reply dt.16/02/2019)