GST on Housing Society

[Kaustubh Karandikar]

XYZ Cooperative Society is having commercial units. XYZ not registered with GST since per member contribution is less than ₹ 7500/- per member. XYZ undertaking repairs of society and per member amount to be recovered from each member ₹ 1 to 2 Lakhs. Is XYZ required to register with GST and charge GST to each member on the amount of repairs recovered?

[Rajagopalan Ranganathan]

Sir,

According to Section 7 (1) (aa) of CGST Act, 2017 as inserted by Section 108 of Finance Act, 2021with effect from 1.7.2017 "the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration" amounts to " supply" and hence liable to GST. Therefore the answer to your query is yes and XYZ is required to register with GST and charge GST to each member on the amount charged and recovered for repairs.

[Ganeshan Kalyani]

In my view registration is not required because even though supply definition constitutes it a as supply but exemption notification provides that if contribution of each member is not more that 7500 then society is not liable to GST.

[A SUBRAHMANYAM]

Registration is essential only when the maintenance charges are 7,500/- and above. The one-time repair charges are not "maaintenance charges," and hence, no need of GST Regn.

[Shilpi Jain]

The 7000 Fahrenheit exemption is eligible only for a housing society or a residential complex and not for commercial units

[Shilpi Jain]

So registration would be required once the total aggregate turnover exceeds the threshold limit

[A SUBRAHMANYAM]

1) Regarding the threshold limit vis-a-vis contribution from each unit/member, please refer to Srl No. 2 and 4 of table appearing in Ministry's Circular No. 109/28/2019- GST dt. 22/07/2019;

2) 7,500/- limit is for member.......no distinction between residential or commercial unit in the Society . Kindly refer to the definition of "person" under Section 2(84)(i) and 2(84)(l) of CGST Act. Accordingly, "Society" is a "person," and when it collects from its "members" as per the prescribed monetary limit is taxable under GST Law.

As such, all Member-based Societies registered as "Society" are non-profit organisations only unless assessed under Income Tax Act for any "business profits/Commercial activity related profits."

AI Summary

GST liability on member contributions may arise if society charges members for repairs, subject to contribution and turnover tests. The statute treats transactions by a society to its members for consideration as a supply, so charges recovered from members for repairs may be taxable; applicability depends on per member contribution exemptions, the society's aggregate turnover triggering registration, the presence of commercial units, and whether charges are routine maintenance or one time repairs.