Madras High court puts stay on single bench order to levy GST on amount of member’s contribution in excess Rs. 7500/- per month
Resident Welfare Associations –– GST on RWA Contributions –– The appellant department raised propositions of law in these appeals and submitted that as per Section 15, it is the transaction value that is subjected to GST and transaction value would be the entire amount contributed towards the maintenance charges. The transaction value cannot be bifurcated. Since no exemption is granted when the amount exceeds Rs. 7500/- the entire transaction value would be subjected to tax. The word ‘upto’ can be interpreted in both ways. Under the negative list approach, with effect from 1 July, 2012, notification No.25/2012-ST [sl.no.28 (c)] provides for exemption to service by a RWA to its own members by way of reimbursement of charges or share of contribution up to five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members. The appellant submitted that clarification was issued through the Circular no. 175/01/2014 - ST dated 10-1-2014 saying if the contribution per member exceeds Rs. 5,000/-, the entire contribution of such members whose contribution exceeds five thousand rupees would be ineligible for exemption under the said notification. The court observed that the legal issue has to be decided as because the learned Single Bench not only quashed the proceedings, but also the Circular issued by the Department needs verification.
Held that:- The Hon’ble High Court issued Notice to the respondents and listed the appeals on 09.12.2021.
Madras High court puts stay on single bench order to levy GST on amount of member’s contribution in excess Rs. 7500/- per month
Resident Welfare Associations –– GST on RWA Contributions –– The appellant department raised propositions of law in these appeals and submitted that as per Section 15, it is the transaction value that is subjected to GST and transaction value would be the entire amount contributed towards the maintenance charges. The transaction value cannot be bifurcated. Since no exemption is granted when the amount exceeds Rs. 7500/- the entire transaction value would be subjected to tax. The word ‘upto’ can be interpreted in both ways. Under the negative list approach, with effect from 1 July, 2012, notification No.25/2012-ST [sl.no.28 (c)] provides for exemption to service by a RWA to its own members by way of reimbursement of charges or share of contribution up to five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members. The appellant submitted that clarification was issued through the Circular no. 175/01/2014 - ST dated 10-1-2014 saying if the contribution per member exceeds Rs. 5,000/-, the entire contribution of such members whose contribution exceeds five thousand rupees would be ineligible for exemption under the said notification. The court observed that the legal issue has to be decided as because the learned Single Bench not only quashed the proceedings, but also the Circular issued by the Department needs verification.
Held that:- The Hon’ble High Court issued Notice to the respondents and listed the appeals on 09.12.2021.