Wednesday, July 24, 2019

GST on monthly subscription/contribution charged by a Residential Welfare Association

Circular No. 109/28/2019-GST

F. No. 332/04/2017-TRU

Government of India

Ministry of Finance
Department of Revenue
(Tax Research Unit)

New Delhi, the 22nd July 2019

The Principal Chief Commissioner/ Chief Commissioners/ Principal Commissioner/ Commissioner of Central Tax (All)/ The Principal Director Generals/ Director Generals (All)
Madam/ Sir,

Subject: Issues related to GST on monthly subscription/contribution charged by a Residential Welfare Association from its members- reg.

A number of issues have been raised regarding the GST payable on the amount charged by a Residential Welfare Association for providing services and goods for the common use of its members in a housing society or a residential complex. The same have been examined and are being clarified below.
Sl. No.IssueClarification
1.Are the maintenance charges paid by residents to the Resident Welfare Association (RWA) in a housing society exempt from GST and if yes, is there an upper limit on the amount of such charges for the exemption to be
Supply of service by RWA (unincorporated body or a non- profit entity registered under any law) to its own members by way of reimbursement of charges or share of contribution up to an amount of Rs. 7500 per month per member for providing services and goods for the common use of its members in a housing society or a residential complex are exempt from GST.
Prior to 25th January 2018, the exemption was available if the charges or share of contribution did not exceed Rs 5000/- per month per member. The limit was increased to Rs. 7500/- per month per member with effect from 25th January 2018. [Refer to clause (c) of Sl. No. 77 to the notification No. 12/2018- Central Tax (Rate) dated 28.06.2018]
An RWA has an aggregate turnover of Rs.20 lakh or less in a financial year. Is it required to take registration and pay GST on maintenance charges if the amount of such charges is more than Rs 7500/- per month per
No. If the aggregate turnover of an RWA does not exceed Rs.20 Lakh in a financial year, it shall not be required to take registration and pay GST even if the amount of maintenance charges exceeds Rs. 7500/- per month per member.
RWA shall be required to pay GST on monthly subscription/ contribution charged from its members, only if such subscription is more than Rs. 7500/- per month per member and the annual aggregate turnover of RWA by way of supplying of services and goods is also Rs. 20 lakhs or more.
Annual turnover of
Monthly maintenance chargeWhether exempt?
More than
Rs. 20 lakhs
More than Rs. 7500/-No
Rs. 7500/- or lessYes
Rs. 20 lakhs or lessMore than Rs. 7500/-Yes
Rs. 7500/- or lessYes
3.Is the RWA entitled to take input tax credit of GST paid on input and services used by it for making supplies to its members and use such ITC for discharge of GST liability on such supplies where the amount charged for such supplies is more than Rs. 7,500/- per month per member?RWAs are entitled to take ITC of GST paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services such as repair and maintenance services.
4.Where a person owns two or more flats in the housing society or residential complex, whether the ceiling of Rs. 7500/- per month per member on the maintenance for the exemption to be available shall be applied per residential apartment or per person?Rs. 15000/- per month as maintenance charges towards maintenance of each apartment to the RWA (Rs. 7500/- per month in respect of each residential apartment), the exemption from GST shall be available to each apartment.
5.How should the RWA calculate GST payable where the maintenance charges exceed Rs. 7500/- per month per member? Is the GST payable only on the amount exceeding Rs. 7500/- or on the entire amount of maintenance charges?The exemption from GST on maintenance charges charged by a RWA from residents is available only if such charges do not exceed Rs. 7500/- per month per member. In case the charges exceed Rs. 7500/- per month per member, the entire amount is taxable. For example, if the maintenance charges are Rs. 9000/- per month per member, GST @18% shall be payable on the entire amount of Rs. 9000/- and not on [Rs. 9000 – Rs. 7500] = Rs. 1500/- .
2. Difficulty, if any, in implementation of the Circular may be brought to the notice of the Board.
Susanta Kumar Mishra
Technical Officer (TRU-II)
Contact No: 011-23095558

with Thanks: Tax Guru

Tuesday, July 23, 2019

RWA’s Condemn Uncharitable Remarks made by CAIT about the Esteemed Members of the Monitoring Committee.

City Traders in their desperation are resorting to distasteful Remarks about the age of Monitoring Committee Members. Traders are not willing to look within and are pointing fingers at the Monitoring Committee, which is doing its job as per the Law and as mandated by SC.

Traders are frustrated that when they manage to browbeat the Political Class and DDA in getting exemptions for blatant Irregularities, which have not and cannot, withstand the test of SC Scrutiny or on the grounds of Social Justice and Equity. They even expect the General Public to subsidize and pay for the cost of Infrastructure Enhancement while asking for Unscientific and Low Conversion Charges.

Unlike Traders, RWA’s neither have the resources nor the Time to organize Street Protests/Rallies, disturbing Civic Life. RWA’s only hope lies in putting across their grievances to the Monitoring Committee, which further places their concerns in front of the SC.
RWA’s Charter of Demand under the 'SAVE OUR CITY CAMPAIGN' to make Delhi liveable has been presented to the MC and DDA.

DDA in its wisdom or under pressure keeps on amending the MPD-2021, OVER 250 TIMES AT LAST COUNT SINCE 2006, to accommodate more and more irregularities, turning Delhi into a Chaotic Slum, the less said about the Environment the better.
RWA's ARE FULLY BEHIND THE MONITORING COMMITTEE, SC SHOULD NOT SUCCUMB TO PRESSURE FROM TRADING LOBBY and hear the case on Day-to-Day basis and decide the applicability of MPD-2021 speedily and justly, keeping the DOCTRINE OF PUBLIC TRUST in mind.

RWAs also feel SADDENED BY THE KEEPING OF ESTABLISHMENTS SEALED FOR LONG PERIODS, which is detrimental for Economy and peace in society as it places people against people, RWAs are unhappy with the inordinate delay by SC in deciding the fate of MPD-2021.

On behalf of ‘SAVE OUR CITY’ Campaign

Joint Signatories 

Saturday, July 20, 2019

Bhagidari of Sheila Dikshit with the RWAs of Delhi !

Sheila Dikshit was the only leader who tried her best to empower the RWAs of Delhi by her novel BHAGIDARI Scheme. The term RWA got a real BOOST during her tenure only. There was no discrimination of any kind and it encouraged more and more localities to form the RWAs and join the Bhagidari Cell of Delhi Government. She also introduced the concept of TEAM DELHI.

Under the Bhagidari scheme, the area SDMs started inviting the RWAs to discuss and resolve various localized issues. All the concerned Departments were also invited in all such meetings to answer the issues of the RWAs. 

It was also a novel gesture introduced by her to virtually talk to the RWAs of Delhi by way of video conferencing. It looked great to have a face to face interaction with the CM, via the video conferencing as well as at various meets.

The Bhagidari cell was created at the Delhi Sachivalay to Register & help the RWAs on various civic issues. An initial fund of Rs 5 Crores was sanctioned for each District and the area Bhagidari Cell started taking requests of the RWAs for various works of repair & maintenance of Roads, Parks, drains, etc. Even the Swings for the Parks and Iron gates for the streets were provided through the RWAs. 

Bhagidari Utsavs were common to interact directly with all the departments of Delhi Government, under a single roof. It really helped to resolve the real issues of various localities as the Departments were answerable to the CM & the Bhagidari Cell.

But her defeat changed the entire scenario. Bhagidari cell vanished and RWAs were no more favorite. Now there is no such interaction with the CM. There is no Bhagidari cell to mediate. SDMs have no orders to invite the RWAs. And it has become very difficult to meet our own elected CM until & unless, we belong to the party cadres.

In fact, it was the Bhagidari Scheme of Delhi Government, that initiated us to Launch our RWA Bhagidari Blog & RWA Bhagidari Website, which also lead to the formation of our RWAs Federation - East Delhi RWAs Joint Front. When we informed the Bhagidari cell of Delhi Government about this development, we got an official letter from them for Congratulating us. 

Even at this stage of her health, she came forward to talk to us on the issue of the Fixed Charges of Electricity & went to the office of Mr. Arvind Kejriwal to talk to him on the issue, seeking the refund of the excess collections by the DISCOMs. She demanded the waiver of the Electricity bills for the next 6 months to compensate the consumers.

Therefore, the RWA community of Delhi can never forget Smt. Sheila Dikshit for her initiatives to Empower the RWAs of Delhi. We can never forget the Bhagidari Cell that was always there during her tenure to support us.  Truly, we are going to miss her a lot. Our Salute to the Departed Soul. RIP.

Friday, July 19, 2019

MVC IV Objections

Joint Assessor & Collector/HQ                                                                       15 July 2019
Assessment & Collection Department, SDMC
20TH Floor, E-1 Block
Civic Centre, Minto Road
New Delhi 110002

Objection to fixing of incorrect total weightage value - GK Enclave I & II and
Request for classification in category C

Dear Sir / Madam,

Please refer SDMC Public Notice no. Tax/HQ/SDMC/MVC-IV/2019/D-447 dated 17 Jun 2019, under section 116B (1) inviting Suggestions/Comments/Objections on recommendations for classifications of Colonies/Areas/Localities, Unit Area Values & factors for implementation of Unit Area System in the Municipal Corporation of Delhi.

As per your Matrix, the GK Enclaves I & II total weightage value has been incorrectly fixed at 93, and needs revision and consequent classification of the colony under category ‘C’. Our objections are based on the facts highlighted as under:

Under Level of Services physical infrastructure: Under this category both GK Enclave I & II have been wrongly awarded “A” category.

1.      Water Supply: GK Enclave 1 Colony has two tube wells from which water is drawn and filled in an overhead tank. This facility was created by the cooperative society utilizing contributions from plot holder-members. Our colony gets treated water occasionally, resulting in residents getting underground water for a limited time every day. This matter is being pursued at CEO / Member DJB level, but so far, supply of treated water remains very occasional.

2.      Sewage and Drainage:  Land was allotted to the society in 1970 and as per the rules at that time, a maximum of two dwelling units each were permitted to be built.  Accordingly, more than 45 years ago, the sewage infrastructure was laid down by the Society, exclusively using the funds mobilized from its members, with a capacity appropriate to the needs at that point in time. The infrastructure isalready cracking with the heavy load placed on it due to twice the number of dwelling units having being permitted to be built over the ensuing years, and as a result of this overload, the sewer gutters are constantly overflowing.

3.      Now the load on our sewer lines has further increased because the sewer line of the newly constructed Police Station-cum-Residence complex has also been connected to our colony’s sewer line. This matter, too, is being pursued at CEO / Member DJB level, but so far, no action and/or reply has been received on augmentation of our sewer lines.

4.      In spite of repeated requests, the desilting of our sewer lines and drainshas not been done.

5.      No system exists in our colony for Solid Waste Management, Energy Generation and Supply. The RWA has engaged its own staff for collection, segregation and dumping on solid waste at the municipal dump near the adjoining Pamposh Colony.

Level of services Social infrastructure: Under this category GK Enclave I & II have both been wrongly awarded “A” category.

1.    Both GK Enclave I & II are colonies that are more than 45 years old.  However, facilities like a Community Centre and an RWA Office are not available and have not been developed by any government agency, although provisions exist to develop these out of funds allotted to the MP / MLA of the area.

2.    The residents have to tread considerable distance to reach the market in Greater Kailash Part-1 though grocery shops are accessible at about 700 to a kilometer. Society land in Greater Kailash Enclave-1 was handed over to DDA to develop a Convenient Shopping Centre so that the colony residents could have retail shopping facilities, but the ground reality is that 90% of these shops are being used as Office Complexes, and the DDA / any other government agency has not taken any corrective measures or action against these defaulters.

Economic Status of Residents:  Under this category also, both GK Enclave I & II have been wrongly awarded “A” category.

1.    The original name of GK Enclave I and II is “East Punjab Railways Refugee Rehabilitation House Building Cooperating Housing Society”. Both colonies were developed on the land allotted to the society formed by Railway employeeswho were forced to leave behind home, hearth, and any other possessions and migrate to India during the 1947 India-Pakistan partition. Accordingly, a majority of the residents are retired Government pensioners. Any increase in the property tax amount will be a very big burden on their already limited income.
Metro Marks:Under this category GK Enclave I has been wrongly awarded “5” points.

1.    The distance between the Metro Station & GK Enclave-1 is more than 1000 meters and that too has to be covered on foot, given the available route. Therefore, there should be NIL point instead of 5 points.
General Observations: The Municipal Corporation constituted the fourth Municipal Valuation Committee (MVC) to find ways to increase the revenue of the Municipal Corporation.  As per IV MVC Interim Report, it was suggested to increase the Unit Area Rate of Property Tax. In this report, the Committee linked the increase of unit area proposals rate with the Consumer Price Index.

We have objections on the Proposals, the Methods adopted & the Findings process to increase tax collections on the following grounds:

1.    Municipal Services cannot be attached with the Consumer Price Index because the objective of construction of the Index is limited to being a macroeconomic gauge. This index is not all indicator of each and every cost. Property tax is a tax to fund the expenses for provision of municipal services. In case municipal services are limited or deficient, there will be no case for increase in the price of the same in consonance with rise in the Consumer Price Index. In particular in case of Greater Kailash Enclave-1, certain services like solid waste collection continue to be financed directly by the residents or the water supply is from facilities created by the Cooperative Society would remain a fact irrespective of the increase in CPI. Rather it would deal a double whammy, firstly to brunt of price inflation and secondly to bear increase in property tax too. 

2.    Property tax is leviable on Annual Value of the property, being the rental value it can fetch from year to year. Unit Rate Method is a simplification of computation but should not deviate from the fundament concept of the Annual Value. The prevailing economic conditions do not support any case of increase in the Annual Value particular, as there is insufficiencies of municipal Facilities major source of evasion augmentation of revenue could be plugging the leakage of revenue as a large number of property owners have reportedly escaped the tax net. Therecould be cases of misdeclaration of use with a view to fitting into a lower use factor and hence lower assessment of tax. The burden of deficiency in enforcement should not be put on the honest taxpayers.

3.    Everybody is aware that a large number of houses located in unauthorized colonies have not been paying any Property Tax because it has never been levied on them. Should the authorities wish to continue to spare them the levy, the burden of cost of services provided to them should not fall on the compliant taxpayers.

4.    Chittaranjan Park, which is a similarly situated colony in all respects as the Greater Kailash Enclave I & II, is proposed to be reclassified as “C”. Chittaranjan Park earlier known as East Pakistan Displaced Persons colony, was classified as C for the reason of it being a “refugees” colony. Greater Kailash Enclave I & II are also “refugee” colonies and were earlier known as “East Punjab Railways Refugee Rehabilitation House Building Cooperating Housing Society”.  In fact, unlike our Greater Kailash Enclave-1 colony, Chittaranjan Park is strewn with markets in its planning. Therefore, there is every justification to reclassify this colony as well to category “C”.
While we do hope our submissions will receive due consideration and our prayer granted, we seek an opportunity of personal hearing to put forth our case.

Submitted for your favorable consideration.

Kind regards,

Wg Cdr Virender Sharma (Retd)
Secretary, RWA GK Enclave - 1
New Delhi 110048

Wednesday, July 17, 2019

Tweet to CM seeking refund of Fixed Charges of Electricity


The Assessment & Collection Department,
South Delhi Municipal Corporation,
20th Floor, SP Mukherjee Civic Centre,
JLN Marg, New Delhi-110002

Dear Sir, 

How can you even think of upwardly recategorization of the colonies in the city which is the most polluted in the world, which is surrounded by the four most polluted cities of the world, where thousands of persons die every year just due to the bad air, i.e. Air Pollution

The city which has an absolute scarcity of drinking water while 40% of it going to the drains under leakages  The city which has no proper drainage system and has to face severe waterlogging in every monsoon. 

The city which is the most congested, facing traffic jam all over. The city which is full of encroachment all over.  

The city which has not enough public transport system. The city where the buses plying on the road are mere 1/3rd of the need. The city with not enough roads, with potholes causing accidents. No walkability.

The city with the mounds of garbage and burning mountains. The city with open khattas at every corner. The city which is full of stray dogs with the scarcity of rabies vaccines. 

The city that has been named as the Rape capital. 

The city with no disaster management action plans and full of unauthorized constructions in spite of being on the seismic zone 4.

The city which has been spoiled by the multiplicity of agencies

The city with Delhi Metro which is not at all a luxury but a basic necessity

The city with 3 MCDs, 3 mayors, in spite of the severe cash crunch. 

And you want to upwardly recategorize the colonies just to get more funds? Please let us know if you are Audited by any agency? Where is the Audit Report?


Lajpat Nagar -1, New Delhi


The Assessment & Collection Department,
South Delhi Municipal Corporation,
20th Floor, SP Mukherjee Civic Centre,
JLN Marg, New Delhi-110002.

PREAMBLE: A Flawed MATRIX, will only result in a Flawed Evaluation for Category and a Wrong Assessment of Tax to be Levied.
Ever since the inception of MCD, over time, services rendered by MCD have been handed over to various separate Boards like DTC, DVB etc or Privatised like BSES or in PPP mode like Garbage Collection, Park Maintenance etc or upkeep of Roads over 60 Feet wide handed to PWD.
MCD is a Failed Entity and a Pompous White Elephant that Delhi can ill afford. It is a mere shadow of what it once was, now offering miniscule services in comparison to its erstwhile responsibilities. All experiments to keep it relevant have failed and has become a 5 Star Dormitory to Accommodate Babus and Netas. Doubling of Councilors or Delimitation in 2007 & 2016 or Trifurcation of MCD in 2012 ...... were experiments carried out to achieve a POLITICAL STRANGLEHOLD RATHER THAN TO ACHIEVE EFFICIENCY.


Further, more than 60% Councilors are from Unauthorised Colonies, these colonies get Municipal Services on account of Special Provisions & Notifications, MCD has no Jurisdiction and has no data base of Properties under the Tax Net. This is discriminatory towards Law Abiding Tax Payers in Planned Developed Colonies who are already disillusioned with Vote Bank Politics

1.      After 5th DFC why has SDMC’s share been curtailed and the Lion’s share has been allocated to NMC and EDMC. Fifth Delhi Finance Commission (DFC) provides for 12.5 per cent of Delhi Governments total tax collection to Municipal Corporations in the city. According to the devolution formula, 12.5 per cent of tax collection that will be transferred to the local bodies will be divided into two parts 6% & 6.5%. The East and North Delhi corporations will receive 65 per cent and 35 per cent, respectively of the first part of the 6%. The remaining 6.5 per cent will be devolved to the local bodies through budgetary provisions of different departments. With the implementation of DFC, the devolution of funds to the SDMC has been drastically curtailed, the move is supposedly an "austerity measure".
2.      MCD has not recruited any new Horticulture, Sanitation, Teaching, Maintenance Staff etc. and hires on Contract basis at Low Emoluments and thousands must have retired over the Past Decade, so how does the need for Higher Taxes arise.
3.      Why has the Tax base not been increased and Amnesty/Exemptions given to defaulters instead of milking the honest Tax Payer.
4.      Is the MVC aware that just a few weeks back Part of New Friends Colony has been downgraded from A to B Category ? The reason is Unscientific Circle Rates, that make it impossible to sell properties. Many colonies that are proposed to be upgraded have a lower Market Value than NFC. Likewise some colonies that the Draft proposes to lower are much higher in valve than those being upgraded.

  1. New Metro Corridors – While appreciating the introduction of Metro, most A, B, C Category Colonies are suffering due to poorly designed Stations, with Autos & Rickshaws creating Traffic Congestion. Wherever the Metro is elevated it has spoiled the Aesthetics of the Colony. Moreover very few residents of Posh Colonies actually use the Metro as it is overcrowded and lack of safe, secure & sure last mile connectivity makes it even more inconvenient.
  2. Conversion of Residential Areas to Mixed Land Use/ Commercial – Whoever thought of this deserves to be conferred the KAPIL SHARMA AWARD FOR IRONIC COMEDY. Seems MCD has not been following the unrelenting protests by RWA’s and admonishments from no less than the SC Appointed Monitoring Committee that the sole reason for Chaos of Delhi Roads is due to Mixed Land / Commercial Streets declared without any Survey or Feasibility Study. IT IS SUGGESTED THAT SUCH PROPERTIES BE CHARGED DOUBLE THE USE FACTOR OF THE CLOSEST COMMERCIAL CENTRE/MARKET.
  3. Higher FAR Benefits – These benefits would have mattered if the corresponding Infrastructure like Parking, Sewage, Water, Parks & Playgrounds, Sanitation, Roads etc had been enhanced, having collected Conversion Charges with the solemn promise of spending the money collected be used FOR DEVELOPMENT OF THE AREA THE MONEY WAS COLLECTED FROM.
  4. Economic Status of Residents – Each colony has a mix of Plot Sizes and with a vastly varying economic status. These colonies being old there are many senior citizens who do not have Pensionable jobs. BE IT KNOWN NOT EVERY CITIZEN IS THE GOVERNMENTS SON-IN-LAW and there is no social security available.
  5. Proximity to Commercial Centers – Agreed, but were these built after the first MVC ??? In fact these Commercial Centers are decaying as not many people want to set up office or Shop at such huge cost or rental as Mixed land Use Streets have been allowed all over  offering much cheaper options at 60% less rent, resulting in the city being in a perpetual state of Chaos.
  6. Infrastructure/Colony Age – There has been no enhancement in Infrastructure, if anything, quality of life has depleted. Air, Sunlight, Road Space, Park which was earlier for 500 Families now caters to 2000 plus families. On top of that allowing all types of Processional activities in basements and rented properties has further depleted scarce resources.
  7. Capital Valve of Land – Is this a CRUEL JOKE, IN FACT DOWNRIGHT DISHONEST ??? Capital appreciation of property arises when one sells a property and THIS NOTIONAL APPRECIATION IS OF NO USE TO THE RESIDENT. State Govt. extracts its pound of flesh by way of 7% Registration Fees. Central Govt. charges a hefty 23.65% including cess by way of Capital Gains Tax. They now have the cheek to tell us hence forth Categorization of colonies will be based on Capital Appreciation irrespective of whether you sell or live in it.


  1. Banks and ATMs > 4 – Banks and ATMs operating out of designated Commercial Centers should attract the same USE FACTER as other activities in the designated Commercial Area. HOWEVER USE FACTOR SHOULD BE DOUBLE (8) in Mixed Land Use/ Commercial Streets of what is Prevalent in the nearest Commercial Center.
  2. Telecom Tower > 4 – In Residential Premises USE FACTOR 400 (Four Hundred) IN RESIDENTIAL AREA ZERO TOLERANCE, THERE SHOULD BE NO TOWERS. HOWEVER USE FACTOR SHOULD BE DOUBLE (8) in Mixed Land Use/ Commercial Streets of what is Prevalent in the nearest Commercial Center.
  3. Hoardings  > 5 – Hoardings atop designated Commercial Centers fine. HOWEVER USE FACTOR SHOULD BE DOUBLE (10) in Mixed Land Use/ Commercial Streets of what is Prevalent in the nearest Commercial Center.
  4. Banquet Halls > 4 – In Residential Premises USE FACTOR 400 (Four Hundred) IN RESIDENTIAL AREA ZERO TOLERANCE, THERE SHOULD BE NO Banquet Halls. HOWEVER USE FACTOR SHOULD BE DOUBLE (8) in Mixed Land Use/ Commercial Streets of what is Prevalent in the nearest Commercial Center.
  5. Guest Houses/Nursing Homes > 2 – Defies Logic……. UNLESS ONE TAKES IN ACCOUNT THAT MORE OFTEN THAN NOT, THEY ARE TAKEN ON PER HOUR BASIS by ….. I need not specify….. ask anyone on the street. GUEST HOUSES/Nursing Homes SHOUD BE 4 in designated Commercial Areas. HOWEVER USE FACTOR SHOULD BE DOUBLE (8) in Mixed Land Use/ Commercial Streets of what is Prevalent in the nearest Commercial Center. None in Residential Areas
  6. Residential > 1 – USE FACTOR 1 Acceptable. HOWEVER USE FACTOR SHOULD BE Four Times (4) in case of Rented premises to Professional and Double (2) in case of self use of Professional.
  7. Vacant Land > 0.5 – USE FACTOR 0.5 Acceptable for up to 2 years of Purchase Date. HOWEVER USE FACTOR SHOULD DOUBLED (1) and Double every 2 years a Plot remains Vacant. This is to discourage Property Speculators and Hoarders to push up Property Prices at the detriment of Genuine Users. SET BACKS SHOULD OFCOURSE BE EXEMTED IN UPTO THE MAXIMUM ALLOWED FAR. If constructed beyond allowed FAR then Use Factor 2.

Further, the applicants seek opportunity of being heard in person at the time of public hearing.

On behalf of ‘SAVE OUR CITY’ Campaign