GST on Housing society

[Kaustubh Karandikar]

XYZ (Cooperative Housing society) is of about 10 buildings and each building is a separately Registered Society. All these buildings are managed by a federation. Federation consists of members from these 10 society only. Federation bills these society a consolidated bill for common maintenance. They charge GST for this. Whereas individual member society does not charge GST and therefore this GST is total loss. To avoid GST loss, 1) can the federation bill individual members and since the individual members bill will be less than 7000/- no GST. 2) Individual society will issue bills to the members and since the individual members bill will be less than 7000/- no GST.

[Rajagopalan Ranganathan]

Sir,

If the federation charges ₹ 7000/- or more from the member societies gst is liable to be paid by the federation and the federation has to get itself registered under CGST Act. The societies may charge the individual members and that charge may be less than ₹ 7000/- and hence there will be no gst. Another thing that will fall for consideration is the rules that governs the functions of the federation and the societies. In my opinion federation cannot issue invoices to individual members since they are not members of the federation.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Renganathan sir

[Bhavika Chothani]

Both the options can be considered to avoid loss of GST. But the only thing which need to be taken into consideration is if the value of individual members bill crosses 7000/- then the federation has to get itself registered to charge GST

AI Summary

GST registration threshold: federation must register and charge GST when supplies to societies exceed threshold; societies may bill members.
Where a federation supplies taxable services to member societies and its supplies to a recipient meet or exceed the statutory registration threshold, the federation must obtain GST registration and charge GST; the federation should not invoice individual flat owners if they are not federation members. Societies may instead invoice their own members and keep individual supplies below the threshold to avoid GST, subject to confirmation of governance rules and the actual pattern of supplies.