RCM provisions on RWA (Residents Welfare Association), Goods and Services Tax - GST

[PANKAJ CHUGH]

Respected Members,

Kindly guide on the following query:

Brief Fact:

the person is a Resident welfare association registered under Societies Registration Act, 1860. It's source of funds is monthly maintenenace collected from residents and also from advertisement, canopy.

The monthly maintenance is less than ₹ 7500/- per member. and annual turnover is also less than ₹ 20 lac.

RWA deploys security guards through a security agency (proprietorship).

Query:

1. whether RWA is required to deposit gst on RCM basis on Security Services ? in terms of Section 9(3) of the CGST Act ?

2. Whether security agency can charge gst in his bill raised to RWA ?

Thanks & Regards

Posts / Replies

[Amit Agrawal]

Shri Kasturi Sethi Ji,

Thank you very much for your kind words of appreciation! Coming from you, makes me more humble!

[PAWAN KUMAR]

yes right mam, section 24 for compulsory registration overrides only on section 22 (1) not on section 23. Hence, rwa need not taking registration and accordingly supplies of security service provider to unregistered rwa will not be taxable under rcm. thanks for giving good opinion and it will helpful in all our working.

[Amit Agrawal]

Relevant portion of Section 25 (1) reads as follows: "Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: ......"

The argument that Section 23 can override requirement of compulsory registration u/s 24 directly ignore above section, in my respectful submission.

Furthermore, such argument - if accepted - will run contrary of harmonious interpretation of other provisions of law and will have far reaching consequences for Govt / Revenue. I feel that we should debate this issue in some different / better scenario.

All above should be treated as strictly personal views of mine only and not a professional advice or suggestion. And I fully respect contrary views.

[KASTURI SETHI]

Sh.Amit Agrawal Ji,

Rightly suggested, Sir. Your approach is visionary. No need to go further in detail.