The Resident Welfare Association (RWA) of SKS Housing Society in Delhi received various amounts during the month of June 2025. The society has three…

CA Final · Indirect Tax Laws · PYQS · January 2026
The Resident Welfare Association (RWA) of SKS Housing Society in Delhi received various amounts during the month of June 2025. The society has three blocks containing 100 two-bedroom flats, 50 four bedroom flats and 50 premium apartments respectively. The following information is provided regarding the collection made by the society during the month of June 2025. (i) Maintenance charges of 5,000/- each have been collected from two-bedroom flats, 7,000/- each from four-bedroom flats and - 9,000/- each from premium flats. The amount of maintenance charges includes collection from Mr. A, who owns 4 two bedrooms, 1 four-bedroom flat and 1 premium apartment. (ii) Electricity charges collected from families of two-bedroom flats apportioned to 1,000/- per flat from 100 flats for use of electricity for use of lifts and lights in common area, parks etc. (iii) A cultural programme was conducted and - 2,000/- per member from four bedroom flats and premium apartments was also collected. (iv) Three members of the SKS Society paid - 5,000/- each for use of space in the publications released by the society. Further RWA is of the view that the RWA is not liable to pay tax as the total amount collected is less than the amount of exemption available per flat based on total amount received/total number of flats. From the above you are required to comment based on the above information with respect to the value of taxable services provided by the Resident Welfare Association (RWA) during the month of June 2025 giving explanation for treatment of each of the item and examine the view taken by RWA.

Suggested Answer and Working Notes:

Answer (a) Particulars Amount (₹) (i) Maintenance charges [Maintenance charges received by an RWA up to an amount of 7,500 per month per member are exempt. In the given case, maintenance charges received by RWA are taxable since they exceed - 7,500 per month per member. Above ceiling/threshold of 7,500 will apply separately to each residential apartment owned by a member. Thus, Mr. A will be eligible for separate ceiling/threshold limit of 7,500 for each of its residential apartments.] 4,50,000 [50 × 9,000] (ii) Electricity charges collected [Not includible in value as collected as pure agent and also excludible while computing above ceiling/threshold of 7,500 12 .] (iii) Cultural programme [Taxable.] 2,00,000 [(2,000 x 50) + (2,000 x 50)] (iv) Use of space in society's publications [Taxable.] 15,000 [5,000×3] Total value of taxable services 13 6,65,000 Thus, view taken by RWA is not correct since exemption limit is to be computed for each type of flats separately. 12 It has been assumed that the electricity charges are being collected by RWA as a pure agent. However, if it is assumed that the electricity charges are not being collected by RWA as a pure agent, same are includible in value as not collected as pure agent. However, since total maintenance charges for two-bedroom flats still do not exceed - 7,500, per month per member, they are exempt. 13 It has been assumed that the RWA is registered under GST.

Topics: Exemptions from GST

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