This initiative seeks to provide relief to millions of urban households.

The appeal was submitted by Dr. Rao VBI Chelikani, President of U-FERWAS, and other office-bearers. It highlights the growing financial burden on middle-class families. The appeal also describes the operational difficulties volunteer-run community associations face under the current GST framework.

Under current GST provisions, RWAs must charge GST on maintenance contributions if their annual turnover exceeds Rs 20 lakh. Due to rising costs for security, housekeeping, utilities, and infrastructure, many urban housing societies now fall within this threshold.

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The association states that RWAs operate on a cost-to-cost, not-for-profit basis, serving only to pool members' funds for common services. These services are already taxed when purchased from vendors, resulting in a cascading tax burden.

In the same residential complex, some residents pay GST while others do not, based on whether their maintenance contribution exceeds Rs 7,500 per month. This disparity has caused friction and dissatisfaction among neighbors receiving identical services.

Although the government suggests ITC would offset the tax burden, the appeal notes many vendors are unregistered. Several expenses are ineligible for ITC. There is no way to pass ITC benefits to individual residents. Consequently, GST becomes a non-recoverable cost for households.

RWAs are managed by volunteers who are not equipped to handle complex GST compliance tasks such as return filing, expense classification, and ITC reconciliation. The Rs 20 lakh turnover threshold, intended for small businesses, is often exceeded by large housing complexes, subjecting them to compliance requirements they were not meant to face.

The appeal invokes the well-established Principle of Mutuality, which holds that a person cannot trade with themselves or make a profit from themselves. When residents pool funds to pay for their own security, cleaning, or maintenance, it does not constitute a commercial supply.

The association cites an April 2025 Kerala High Court judgment in IMA vs. Union of India, which held that mutual contributions to RWAs are not a taxable supply under GST. The Supreme Court later ordered no GST recovery pending the matter's resolution.

The appeal notes that RWAs now perform many functions traditionally managed by municipal bodies. These include public safety, sanitation, park maintenance, street lighting, and water distribution. Taxing RWAs for these services leads to double taxation, since residents already pay municipal taxes and statutory levies.

The association urges the GST Council to promptly address the issue by, re-examining the GST applicability on maintenance contributions in light of the principle of mutuality and recent court judgments, clearly excluding these contributions from GST to recognize their non-commercial nature, issuing unambiguous policy guidance to ensure effective, consistent nationwide implementation, and adjusting the GST framework to deliver uniform relief for all RWAs of the country. The association calls for immediate action to prevent further burden on millions of households.

The appeal emphasizes that revenue from taxing RWAs is negligible in the overall GST framework. In contrast, the social and economic burden on millions of households is substantial.

"RWAs are community-driven, not-for-profit institutions functioning on the principle of mutuality and collective welfare," the submission states. "Subjecting such associations to GST effectively results in taxing the shared cost of living rather than any commercial value addition."