Introduction
Co-operative Housing Societies are entities registered under the co-operative laws of the respective States. A “housing society” means these are a collective body of persons, who stay in a residential society. As a collective body, they would be supplying certain services to its members, be it collecting statutory dues from its members and remitting to statutory authorities, maintenance of the building, security etc.
GST registration requirements for housing societies
If the turnover of Resdiential Housing Society (RWA) is more than 20 lakhs, it needs to take registration under GST in terms of Section 22 of the CGST Act, 2017. That means the collection of money maintenance charges by society exceeds Rs 20 Lakhs per annum then the Society need to be Registered under GST.
It means that if the aggregate turnover (total receipts) of the Housing Societies which generally includes society maintenance charges from its members, receipts from investments, income receipts from advertisement board, receipts from mobile towers in premises, Share transfer fee from members, receipts from special purpose use of common area by member (marriage function etc) etc. Housing Society is liable to register if total of all the receipts (including exempted receipts) exceeds Rs. 20 Lakh in a financial year. Society need to file on regular basis GSTR1 & GSTR3B
Exemption Limit for Housing Societies
Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017 at sr.no.77 provides for the following exemption to housing societies: 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 service Tax; or
(c) up to an amount of Seven thousand five hundred rupees 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
In view of the provision contained at (c) above, a society may be registered under GST, however if the monthly contribution received from members is less than Rs. 7,500/ - (and the amount is for the purpose of sourcing of goods and services from a third person for the common use of its members), no GST is to be charged by the housing society on the monthly bill raised by the society. However, GST would be applicable if the monthly contribution exceeds Rs. 7,500/ -.
Do Housing Societies Have To Pay GST on Electrcity / Property Tax , Etc.
Certain statutory dues such as property tax, electricity charges etc form part of the monthly maintenance bill raised by the society on its members. The question would arise whether such charges should be included while computing the monthly limit of Rs. 7,500/- in terms of clause (c) of sr.no.77 of notification 12/2017 -Central Tax (Rate) dated 28.06.2017. As per clause (b) of the above exemption, exemption is available to housing societies for provision of carrying out any activity which is exempt from the levy of Goods and service Tax assuming that a housing society is a non-profit registered entity; and property tax and electricity is exempt from the levy of GST. Thus, charges, collected by the society on account of property tax, electricity charges and other statutory levies would be excluded while calculating the limit of Rs. 7,500/-.
Is GST To Be Paid on Amount Exceeding Rs 7500 or on Full Amount ?
Case 2 if the monthly bill is say Rs. 9,000/- (and the same is on account of services for common use of its members), will GST be applicable on Rs. 9,000/- or Rs. 1,500/- which is in excess of Rs. 7500/-. In such cases, exemption is available up to an amount of Rs. 7,500/- and GST would be applicable on the entire amount of Rs, 9000/- and not on [ Rs. 9000 – Rs. 7500] = Rs. 1500/- .The rate if tax would be 18% and also RWA are not eligible for composition scheme .
If a Building Have Two Types of Flat - 1BHK with Maintainance of Rs 6000 per month and 2BHK with Rs 8000 per month than will GST be applicable on both?
No, GST will be applicable only on 2BHK Flat whose maintainance is more than Rs 7500 and GST will be payable on whole Rs 8000 amount. GST on 1BHK Flat Maintenance will be exempt
Taxability of Share Transfer Fees / Non Occupacy Charges / Late Payment Charges
No exemption is available of Rs 7500 for Share Transfer Fees / Non Occupancy and Late Payment Charges becasue this are services / charges levied by RWA's from its members without any involvement of third party. Thus, if RWA provide services / income which do not include element of sourcing of goods or services from a third person for the common use of its members than it is completely taxable in subject to RWA's is liable to get registered under GST due to crossing of its aggregate turnover of Rs 20 Lakhs.
Can Input Tax Credit (ITC) be allowed to Housing Society
If the Society becomes liable to pay GST, it is allowed to take Input Tax Credit under Sec 16 (1) of CGST Act subject to conditions for taking input tax credit. Housing Society is entitled to ITC in respect of taxes paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services such as repair and maintenance services – Lift AMC, Housekeeping, Security, Fire AMC, Repairs & Maintenance, Contract staff, Accounting & Auditing Services and other such services.
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