Page 119 - GSTL_30th April 2020_Vol 35_Part 5

2020 ] IN RE : LATEST DEVELOPERS ADVISORY LTD. 605
2. A RWA has No. If aggregate turnover of an RWA does not
aggregate turn- exceed Rs. 20 lakh in a financial year, it shall
over of Rs. 20 not be required to take registration and pay
lakh or less in GST even if the amount of maintenance charges
a financial exceeds Rs. 7500/- per month per member.
year. Is it re- RWA shall be required to pay GST on monthly
quired to take subscription/contribution charged from its
registration members, only if such subscription is more
and pay GST than Rs. 7500/- per month per member and the
on mainte- annual aggregate turnover of RWA by way of
nance charges supplying of services and goods is also Rs. 20
if the amount lakhs or more.
of such charges Annual Monthly Whether
is more than turnover of maintenance charge exempt?
Rs. 7500/- per RWA
month per More than More than Rs. 7500/- No
member?
Rs. 20 lakhs Rs. 7500/- or less Yes
Rs. 20 lakhs More than Rs. 7500/- Yes
or less Rs. 7500/- or less Yes

(j) In the instant case, we find that the applicant is providing services
to the society (RWA) in two parts viz. all services of maintenance
(other than supply of water) and supply of water. We further ob-
serve that as a general practice across trade and market, the mainte-
nance services is inclusive of supply of water and hence supply of
water provided by the applicant through a separate agreement rais-
es a suspicion in its activity. The reason behind the suspicion is that
the water received by the society (RWA) is used for multiple pur-
pose i.e. for gardens, washing cleaning, swimming pool and for the
use in the apartments etc. and is stored in the common under-
ground water tank which is maintained by the society (RWA).
(k) In view of the above facts, it is observed that the applicant seems to
have bifurcated the services provided to society (RWA) in order to
escape the condition of Rs. 7500 per month per member or it might
be crossing the GST registration threshold limit of Rs. 20 lakh.
(l) We further observe that, in general each society consists of many
Residential towers, varying floors from three to fifteen plus and fur-
ther each tower consists of many residential apartments which have
a common underground and overhead water storage tank. Even
though the applicant might have a separate agreement for supply of
water and for receiving charges on the basis of per square feet with
the residents of the apartment in a particular tower but it is not pos-
sible to supply water to each apartment separately as mentioned in
the Contract-II, because the apartments do not have their own sepa-
rate water storage tanks.
(m) Therefore, in other words supply of water is actually to the Society
(RWA) and the applicant is trying to split the Contract into Contract
I and II to avoid the GST to facilitate Society (RWA) in order to keep
the maintenance charges paid by the residents below Rs. 7500/-.
Further we also observe that water charges collected from the indi-
GST LAW TIMES  30th April 2020  119