How GST applies to flat owners, RWAs

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How GST applies to flat owners is the new question as there’s an important update by the government. Therefore, In this article, we will discuss the critical query of How GST applies to flat owners, RWAs and What GST is.

What is GST?

As the name suggests, The Goods and Services Tax (GST) is a tax imposed on the supply of goods and services.

The primary goal of this tax structure is to manage the cascading effects of other indirect taxes. The other indirect taxes include service tax, excise duty, VAT, and others.

It came into effect in July 2017 and is currently applicable in the Indian taxation system.

What conditions have GST applicable on flat owners, RWAs?

Under the following circumstances, Flat owners , RWAs will have to pay GST.

  • If the flat owner pays a monthly maintenance fee of Rs. 7,500 or more.
  • The RWA collects at least Rs. 20 lakh per year.

However, it is important to note that GST applies on flat owners, RWAs both. Otherwise, no GST will be applicable at all.

It simply means If the RWA’s annual collection exceeds Rs. 20 lakh but the maintenance fee payment by the property holder is less than Rs. 7,500, then no GST will be applicable.

In a similar manner, if the flat owner pays Rs. Seven thousand five hundred or more, but the RWAs yearly revenue is less than Rs. 20 lakh, neither of them will be obliged to pay Goods and services tax on maintenance.

How much would GST be compensated for RWA and the flat owner?

If both the RWA and the flat owners meet the GST requirements, both will have to pay 18% GST on maintenance fees. On the other hand, RWA can obtain an input tax credit for taxes paid on capital goods. For instance, water pumps, furniture, and generators.

Therefore, it’s important to know GST Registration and GST Return Filing.

What is GST Registration?

GST Registration is the procedure for registering a taxpayer or corporation under the GST rules. The Central government generates a unique 15-digit Goods and Services Tax Identifying Number (GSTIN) to the taxpayer/business after the GST registration process gets completion.

What is GST Return Filing?

GST return filing is compulsory once you receive a GST registration. A company must file a ‘Nil’ GST return even if it does not make a single transaction. Late GST returns filing results in significant fines and penalties, as well as other consequences. Therefore, businesses need to do GST Return Filing accurately and on time.

GST Collection April 2021

If you want any other guidance related to GST Registration or GST Return filing, please feel free to talk to our business advisors at 8881-069-069.

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