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GST on Co-operative Housing Society

GST on Co-operative Housing Society

Meaning of Co-operative Housing Society – Co-operative Housing Societies are entities registered under the co-operative laws of the respective States. These are collective body of persons, who stay in a residential society and as a collective body, they supply certain services to its members, be it collecting statutory dues from its members and remitting to statutory authorities, maintenance of the building, security etc.

A Co-operative Housing Society is akin to a club, which is composed of its members. Service provided by a Housing Society to its members is treated as service provided by one person to another. The activities of the housing society would attract the levy of GST and the housing society would be required to register and comply with the GST Law.

GST on services provided by a Co-operative Housing Society

If the turnover of housing society is above Rs. 20 lakhs, it needs to take registration under GST in terms of section 22 of the CGST Act, 2017. However, taking registration does not mean that the housing society has to compulsorily charge GST in the monthly maintenance bills raised on its members. If the services provided by it are exempt under exemption notification, then it is not required to charge GST on the said activities.

For instance, in view of entry 77(c) above, a society may be registered under GST, but if the monthly contribution received from the 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, if the monthly contribution exceeds Rs. 7,500/-, GST would be applicable.

Further, if the turnover of the society is less than Rs. 20 lakh or even if the turnover is beyond Rs. 20 lakh, but the monthly contribution of all the individual members towards maintenance is less than Rs. 7,500/- (such services being exempt) and the society is providing no other taxable service to its members or outsiders, then the society (essentially exclusively providing wholly exempt services) need not take registration under GST.

Monthly limit of Rs. 7,500

Statutory dues such as property tax, electricity charges etc. forming part of the monthly maintenance bill raised by the society on its members would be excluded while computing the aforesaid monthly limit of Rs. 7,500

If the monthly bill is say Rs. 8,000/- (and the same is on account of services for common use of its members), exemption is available up to an amount of Rs. 7,500/- and GST would be applicable on the amount in excess of Rs. 7,500/- (viz. Rs. 500 in this case)

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