New Delhi, July 13 (IANS): Services provided by housing societies across the country will not become expensive under the Goods and Services Tax (GST) system, the government said on Thursday.

"There are some press reports that services provided by a Residents Welfare Association (RWA) will become expensive under the GST. These are completely unsubstantiated," a Finance Ministry statement here said. 

A RWA shall be required to pay GST on monthly subscription/contribution charged from its members if such subscription is more than Rs 5,000 per member and the annual turnover of RWA by way of supply of services and goods is also Rs 20 lakh or more. 

"Under the GST, the tax burden on RWAs will be lower for the simple reason that they will now be entitled to ITC (Input Tax Credit) in respect of taxes paid by them on capital goods (generators, water pumps, lawn furniture), goods (taps, pipes, and other sanitary/hardware fittings) and input services such as repairs and maintenance services," it said.

The ITC on central excise and VAT paid on goods and capital goods was not available in the pre-GST period and these were a cost to the RWA.

Thus, there is no change made to services provided by the housing society to its members in the GST era, the Ministry said.

Supply of service by RWA (unincorporated body or a registered non-profit entity) to its own members by way of reimbursement of charges or share of contribution up to Rs 5,000 per month per member for providing services and goods for common use of its members in a housing society/residential complex are exempt from GST.

Further, if the aggregate turnover of such RWA is up to Rs 20 lakh in a financial year, then such supplies would be exempted from GST even if charges per member are more than Rs 5,000, it said.