This is to give you clarity on the subject GST on Housing Societies.

  SAHAKARSUTRA

July 20, 2017.

The Chairman/ Secretary,

Dear Sirs,

This is to give you clarity on the subject GST on Housing Societies.

Registration :

A Co-op Hsg 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 & 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 5000/- 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 5000/- per month , GST will be charged. [ provided the aggregate turnover is more than Rs 20 Lakhs annually. ]

Reverse Charge: 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 BMC .
•Sinking fund : is covered under Deposits without any provision of supply of service and thus, is outside the provisions of GST. However, on utilization 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 organizations 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 ]
•Interest earned from banks is “Exempt” from GST .
•Rent received from any Hoarding / Cell phone tower etc, is taxable under the categories :-

997211 : Rental or Leasing Services involving own or leased residential property.

997212 :Rental or Leasing Services involving own or leased non- residential property .

(iii) All other incomes and receipts such as

Facility booking charges
Fit out charges
Reimbursement of Expenditure
Share Transfer premium
Membership Entrance Fee / Share Transfer fee
Exhibition in the Society premises etc.

- Are taxable.

Security Deposits : All refundable security deposits are outside the provisions 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.

(iii) 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 payments.

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 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 Reconcilliation statement certified by a Chartered Accountant.

All the returns are time bound .

Return GSTR – 1. This return has to be filed on or before 10th of Each month. In this return one will report the invoice details of all the registered recipients, and the summary of all the invoices raised to unregistered recipients. Also the return includes all tax liability arising out of Reverse Charge .

If there be any corrections in the invoices either through a Debit note / Credit note or omissions/ wrong reporting in the previous returns etc, the same have also to be reported under the relevant sub-returns.



There are certain other statistical informations to be furnished such as total amount of Zero rated supplies, Exempted Supplies , Supplies outside the purview of GST , Sl no of invoices issues, invoices cancelled and net number of invoices issued. Etc.

While making the return, the Society will also state the GST liability.

GSTR – 2. This return has to be filed during the period 11th to 15th of each month for all the Input Services of the previous Month. To the extent the Registered Suppliers of Goods or Services have provided the details in their GSTR -1 return, the data will be auto populated, and the society has only to verify the same. Any corrections, omissions etc can be incorporated in this return.

Besides this, the Society has to file all the individual invoice data regarding Inward Supply from unregistered Vendors.

There are certain other information to be provided such total amount of Zero rated supplies, Exempted Supplies , Supplies outside the purview of GST etc.

While filing the details of the invoices, the Society will also file the Input Tax credit available to it.

Matching :   This is an action to be undertaken by the Society between 16th and 17th . Any corrections or additions made by the Registered Recipient through his GSTR -2 will be available for acceptance or corrections, or rejections by the Society.

GSTR – 3. This return has to be filed on or before 20th of each month after payment of GST . This is a return to show the liability of the Society to pay the GST . This is auto populated . The return will allow the Society to adjust the GST payable by it through debit to its GST paid ledger, Input Tax ledger etc. The interest, penalty or any other demand also can be adjusted out of the GST paid account.

Annual Return – The annual return has to be filed on or before 31st of December next year. This is basically a Annual Reconciliation Statement. For Aggregate annual turnover less than Rs 1 Crore, the return is self certified. For aggregate turnover exceeding Rs 1 Crore, the return has to be certified by a Chartered Accountant.

Corrections reporting in GSTR 1 and GSTR 2 will be allowed for any month of the year, upto September next, or upto the date of filling of the Annual Return whichever is earlier.

Hope this clears all ambiguity about GST on Housing societies.

Regards,

For SAHAKARSUTRA,

Dayanand Nene
President.