Registered non-profit entities, including RWAs and AOAs, have been spared from the levy of GST.
The exemption bar of service tax for non-profit organisations under GST has been raised to Rs 20 lakh from Rs 10 lakh.
Through a notification, the GST council has clearly stated that registered non-profit entities have been spared from the exaction of GST for providing services to its members.
RWAs or AOAs, considered non-profit entities under the GST, usually collect money from residents for services availed by them. This amount is then paid to the service provider without charging any commission. Hence, the exclusion from service tax on an aggregate turnover of up to Rs 20 lakh.
For any registered housing society or a residential complex, individuals whose monthly maintenance contribution don't exceed Rs 5,000 per household will be exempted from the GST.
According to an officer with the Central Excise and Customs Office in Noida, if the aggregate turnover exceeds Rs 20 lakh in a financial year, the RWA will come under the Composition Scheme. The scheme holds true if the annual turnover is below Rs 75 lakh, and Rs 50 lakh in the case of a few states. The objective of this scheme is to bring simplicity and reduce the compliance cost for the small taxpayers.
Under it, service suppliers are required to pay 1 per cent GST and 0 .5 per cent central tax and 0.5 per cent state tax.
