Supply under GST: recoveries for water and electricity are taxable; corpus advances taxed on receipt; community centre fees exempt up to statutory ceiling.

Recovery of water and electricity charges by a homeowners association constitutes part of its taxable maintenance services under the definition of "supply" and is includible in the value of the association's service; electricity recoveries cannot be excluded under the pure agent rule because the association procures and uses electricity in furtherance of its services. Non refundable corpus contributions are advances for future supply and constitute consideration, attracting GST at the time of receipt. Monthly community centre upkeep charges qualify for exemption only up to the statutory per member maintenance ceiling; amounts exceeding the ceiling are taxable when aggregated with other maintenance charges.

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Issues: (i) Whether recovery of water charges from members on actual cost basis is liable to GST when water is otherwise exempt; (ii) Whether recovery of electricity charges for common areas on actual cost basis is liable to GST; (iii) Whether collection of corpus fund from members for future capital expenditure constitutes a "supply" and if so the time of supply for GST; (iv) Whether monthly charges for upkeep of the community centre qualify for exemption up to Rs.7,500 per member per month under Entry No.77 of Notification No.12/2017-Central Tax (Rate).

Issue (i): Whether recovery of water charges from members on actual cost basis is liable to GST when water is otherwise exempt.

Analysis: Relevant provisions include the scope of "supply" under Section 7(1) including clause (aa) treating activities by a person to its members as supply, the definition of "person" under Section 2(84), and Entry No.99 of Notification No.02/2017-Central Tax (Rate) exempting water. The recovery of water charges is made by the association as part of its overall maintenance services to members and is not a standalone sale of goods by the association; the association's activities are classifiable under services of membership organisations (home owners association). The exemption for water does not automatically render such recovery outside the value of the association's supply where the recovery forms part of the composite consideration for maintenance services.

Conclusion: Against Assessee - recovery of water charges forms part of the association's taxable maintenance services and is subject to GST, subject to the ceiling under Entry No.77 of Notification No.12/2017-Central Tax (Rate).

Issue (ii): Whether recovery of electricity charges for common areas on actual cost basis is liable to GST.

Analysis: Considerations include Serial No.104 of Notification No.02/2017-Central Tax (Rate) (exemption for electrical energy), Rule 33 (pure agent exclusion), and the classification of the association's activities as supply to members. To qualify for exclusion under Rule 33 the association must act as a pure agent meeting all conditions (payment on authorization, separate invoice indication, no title or use for own interest, exact recovery). The electricity is billed in the association's name and consumed as input for provision of maintenance services; the association does not satisfy pure agent conditions because it procures and uses electricity in furtherance of its own service obligation to members. Consequently the recovered electricity cost forms part of the value of maintenance services supplied to members.

Conclusion: Against Assessee - recovery of electricity charges is part of taxable maintenance services and liable to GST, subject to the ceiling under Entry No.77 of Notification No.12/2017-Central Tax (Rate).

Issue (iii): Whether collection of corpus fund from members for future capital expenditure constitutes a "supply" and, if so, the time of supply for GST.

Analysis: The definition of "supply" (Section 7) and "consideration" (Section 2(31)) are applied, together with the proviso that a deposit is not consideration unless applied as such. The by-laws are silent on refund, the corpus contributions are non-refundable and are intended as advances for future services (capital works) provided by the association. Such non-refundable collections qualify as advances for future supply rather than refundable deposits. Time-of-supply provisions under Section 13(2)(a) provide that time of supply of services is the earlier of invoice date or date of receipt of payment; where payment is received in advance before supply, time of supply is the date of receipt.

Conclusion: Against Assessee - corpus fund contributions constitute a taxable supply (advances for future supply) and GST is payable at the time of receipt of the corpus fund.

Issue (iv): Whether monthly charges for upkeep of the community centre qualify for exemption up to Rs.7,500 per member per month under Entry No.77 of Notification No.12/2017-Central Tax (Rate).

Analysis: Entry No.77 exempts services by unincorporated bodies/non-profit entities to their own members by way of reimbursement or share of contribution up to Rs.7,500 per month per member for sourcing goods or services for common use in a residential society. Circular guidance confirms that maintenance charges up to Rs.7,500 per member per month are exempt and that exceeding the limit makes the entire amount taxable. The community centre charges are part of maintenance of the residential complex, rendered exclusively to members, and are classified as services of membership organisations (home owners association).

Conclusion: In favour of Assessee - monthly community centre maintenance charges qualify for exemption up to Rs.7,500 per member per month under Entry No.77 of Notification No.12/2017-Central Tax (Rate), subject to the condition that the amount represents the inclusive maintenance charge for the complex.

Final Conclusion: The association's recoveries of water and electricity charges are taxable as part of the maintenance services supplied to members (and not separable exempt supplies), corpus fund collections are taxable advances with time of supply on receipt, while monthly community centre maintenance charges are exempt up to Rs.7,500 per member per month under Entry No.77; GST consequences therefore depend on aggregation with other maintenance charges against the exemption ceiling.

Ratio Decidendi: Collections by an association from its members that are non-refundable and constitute consideration for services rendered by the association fall within "supply" under Section 7 and attract GST, with time of supply for such advances determined under Section 13(2)(a) as the date of receipt; recoveries of third-party inputs (water/electricity) billed to and used by the association form part of the value of the maintenance service unless the strict conditions of Rule 33 for pure agent exclusion are satisfied, and maintenance charges qualify for the Entry No.77 exemption only up to Rs.7,500 per member per month.

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