The term “co-operative housing society” refers to a legal entity formed in accordance with state co-op regulations. Housing societies are defined by the Maharashtra Co-operative Society Act, 1960, Section 2(16), as organizations whose primary purpose is to provide members with open plots for housing, dwelling houses, or flats; or, if such properties have already been acquired, to provide members with common amenities and services. These are the people who live in a certain community. Collectively, they would provide members with a variety of benefits, such as the collection and remittance of statutory dues, the upkeep and security of the building, and so on. This article will discuss all the concepts of GST on co-operative housing society.
Is GST applicable on Cooperative Housing Societies?
In the same way that a club is made up of its members, a Society may be thought of as a collection of like-minded individuals. The question then becomes whether or not the services supplied by a Housing Society to its members may be equated with those given by an individual. The correct response is “yes.”
Understand the GST applicability on Cooperative Housing Society
It is on the provision of goods and services that GST is levied, as per Section 9 of the CGST Act, 2017. All kinds of provision of products or services or both made or agreed to be made for a consideration by a person in the course or furtherance of business, including the sale, transfer, barter, exchange, license, rental, lease, or disposal (as defined in Section 7);
A co-operative society that has been registered under legislation pertaining to co-operative societies is considered a “person” for the purposes of the CGST Act, 2017 because of Section 2(84)(i). Accordingly, the CGST Act considers a registered co-operative society to be a “person.”
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GST Compliance Obligations on Cooperative Housing Society
A housing society must apply for GST Registration under Section 22 of the CGST Act, 2017 if its annual revenue is more than 20 lakhs. Nevertheless, registering does not obligate the housing society to include GST in the monthly maintenance fees charged to members. Because, a housing society may become GST-registered in light of the provision in bove; nevertheless, 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), the society is not required to include GST in the monthly bill raised to its members. Nonetheless, if the monthly payment is more than Rs. 7,500/ -, GST will be imposed.
It is important to note that if a housing society is a non-profit registered entity, clause (b) of the above allowances allows housing societies to be excluded from the levy of GST for the provision of carrying out any activity which is excluded from the levy of Goods and service Tax; and property tax and electricity are exempt from the levy of GST. Therefore, the Rs. 7,500/- limit would not include costs collected by the society for things like property tax, electricity taxes, and other legal levies.
In short, a society (essentially Exclusively providing wholly exempt services) does not need to take registration under GST if its annual revenue is less than Rs.20 Lakhs, or if its annual revenue is more than Rs.20 lakhs but the monthly amount of individual members towards upkeep is less than Rs.7,500/- (such services being exempt) and the society is providing no other taxable service to its members or outsiders. Since the society is able to claim ITC under GST after GST Return Filing, which was not possible under service tax, the overall tax burden has decreased. Furthermore, the granted exemptions guarantee that no tax burden falls on less developed or small societies.
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