# Services by Unincorporated Body / Non-Profit Entity to Members

## Conditions for Exemption

Services provided by an unincorporated body or non-profit entity registered under any law for time being in force, to its own members by way of reimbursement of charges or share of contribution:

### Category 1 - Always Exempt

1. As a Trade Union → EXEMPT

2. Activity exempt from levy of GST (carrying out activity that itself is exempt) → EXEMPT

### Category 2 - Exempt Subject to Limit

3. Up to ₹7,500 per month per member for sourcing of goods and services from a third person for common use of members in a housing society or residential complex → EXEMPT

## RWA (Resident Welfare Association) - Latest Position

Threshold: ₹7,500 per month per member
If maintenance charges per member exceed ₹7,500/month → ENTIRE AMOUNT IS TAXABLE (not just the excess)
This is a 'cliff' not a slab

## Worked Threshold Logic

Monthly contribution per member	GST Treatment
₹7,000	Fully Exempt
₹7,500	Fully Exempt
₹7,501	Fully Taxable on ₹7,501
₹10,000	Fully Taxable on ₹10,000

Worked example

### Example 1

Example 1: A housing society collects ₹6,500/month from each member for maintenance.

Answer: EXEMPT - Below ₹7,500/month threshold.

### Example 2

Example 2: A RWA collects ₹8,000/month from each flat owner.

Answer: FULLY TAXABLE on ₹8,000 - Exceeds ₹7,500 threshold, hence entire amount becomes taxable (not just ₹500 excess).

### Example 3

Example 3: A trade union collects membership subscription of ₹15,000/year from each member.

Answer: EXEMPT - Trade union services to its members are exempt without any monetary limit.

⚠️ Common exam mistakes

Taxing only the excess over ₹7,500 - the entire amount becomes taxable if threshold is breached.
Applying the ₹7,500 limit to trade unions - trade union services are exempt without limit.
Treating annual collection - the limit is ₹7,500 PER MONTH per member.
Forgetting the limit applies per member (not total society collection).

Bare-Act text Entry 77 · Notification No. 12/2017-Central Tax (Rate) · click to expand

Service by an unincorporated body or a non-profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution - (a) as a trade union; (b) for the provision of carrying out any activity which is exempt from the levy of Goods and Services Tax; (c) up to an amount of ₹7,500 per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

GST Exemptions - Services by RWA/Trade Union/Non-Profit Entities

Worked example

⚠️ Common exam mistakes