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GST For Housing Societies In Maharashtra

Friday, September 01, 2017

GST came into effect a couple of months back, and co-operative housing societies too need to be registered under the same if the aggregate turnover exceeds Rs. 20 lakhs annually. Vishwasrao Sakpal gives us all the significant insights

The introduction of Goods and Services Tax (GST) is being seen as a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax, it is expected to mitigate cascading or double taxation in a major way and pave the way for a common national market. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which was estimated to be around 25% - 30% earlier.

GST For Housing Societies  
A co-operative housing society is required to be registered under GST, if the aggregate turnover exceeds Rs. 20 lakhs annually. Aggregate turnover shall include all taxable and exempt services. Aggregate turnover means all billing other than Municipal Tax and Sinking Fund, but includes interest received from banks and members.

Registration
If the society has to pay GST under Reverse Charge (supply of services by Advocates), irrespective of the turnover, the society has to Register under GST.

Exemptions
If the maintenance charges towards reimbursement of charges/contributions is less than Rs.5,000/- per month, GST will not be charged to such members. However, such members will be charged GST on vehicle parking charges, non-occupancy charges, facility booking, share transfer premium etc., which are not of the kind of contributions or reimbursement of charges. If the maintenance charges towards reimbursement of charges/contributions exceeds Rs. 5,000/- per month, GST will be charged. (provided the aggregate turnover is more than Rs. 20 lakhs annually)

Reverse Charges
If the society receives any supply of services from Advocates/firm of Advocates, the society has to register under GST and pay the GST under Reverse in case of a society registered under GST, the GST shall be paid on inward supply of goods/services by an unregistered vendor under Reverse Charge.

Taxation on Bills raised on members

  • Municipal Tax:  is covered under services provided by the society to its members as an Agent of the Service Recipient and thus, outside the provisions of GST. However, exact amount of municipal tax is required to be recovered from members as paid to municipal corporation.
     
  • Sinking Fund:  is covered under Deposits without any provision of supply of service and thus, is outside the provisions of GST. However, on utilisation of the sinking fund, it will become Taxable and Tax has to be paid.

Water Charges
Water is procured by the society from the municipal corporation and is supplied to the members. Water is a "goods" and attracts "zero" rate of tax. All other charges, including electricity, repair fund, maintenance charges, service charges, vehicle parking charges, non-occupancy charges, any other recovery of expenditure, etc., are taxable under the category "services provided by other membership organisations n.e.c." under SAC number "999599".

Interest/penalty on delayed payment of maintenance charges is taxable under GST. Advance received from members, if any, towards the maintenance charges, is taxable under GST, adjustable against GST payable on raising of monthly/quarterly bill.

Taxation on other Income (from members or non-members)
(1)  Interest earned from banks is " Exempt  " from GST.

(2)  Rent received from any Hoarding / Cell phone tower etc., is taxable under the categories :-
(a) 997211 - Rental or Leasing Services involving own or leased residential property.
(b) 997212   - Rental or Leasing Services involving own or leased  non-residential property.

(3)  All other incomes and receipts such as :--
(a) Facility booking charges
(b) Fit out charges
(c) Reimbursementof expenditure
(d) Share Transfer premium
(e) Membership Entrance Fee / Share Transfer Fee
(f) Exhibition in the society premises etc. are taxable.

Security Deposits
All refundable security deposits are outside the provision of GST.

Input Tax Credit: All the GST paid on inward supply either for services or for goods, can be set off against  liability to pay GST by the society. However, in case of capital goods procurement  (Fixed  Assets ), the Input Tax Credit can be availed equally spread over five years. If the society is availing the benefit of exemption, then proportionate Input Tax Credit as is attributable to exempted services will not be available for Input Tax Credit.

Tax payment: GST has to be paid on or before 20th of each month for the tax liability of the previous month. GST is to be paid after adjustment of Input Tax Credit available. All GST has to be paid electronically. A challan can be downloaded from the GSTN. ( This is the application of the department to deal with all GST matters — Returns, Refunds, Payments, etc.,) and this challan can be paid at any approved bank. Any Registered Society is required to file three monthly returns and one annual return. If the aggregate turnover of the society exceeds, then the Annual Report has to be submitted along with a Reconciliation Statement certified by a Chartered Accountant.

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