GST on Piped LPG in a Apartment Association

[sfs 407]

We are a apartment owners association (RWA) registered under Co-op act. Our turnover exceeds 20 lakh, but exempted from GST due to ₹ 7500 per month per members clause, hence don't have GST number.

We have centralized piped LPG (reticulated gas system) We procure bulk domestic use cylinders from Authorised Indane agent and supply to all flats through pipes. Prepaid meters are installed in all the flats & residents need to recharge their smart card & pay as per their usage.

We, the Society don't make any profit, but incur some loss due to distribution loss which is covered by Maintenance charge.

We don't have an agreement with residents. However, piped LPG is mandatory as per fire department terms, residents don't have any option to keep LPG cylinder in their home. (so, it's statutory obligation)

Invoice for bulk cylinders are raised in the name of Society, not in individual's name.

Now the question is;

1) Does it qualify as reimbursement of expenses?

2) If not, do we have to obtain GST number & collect tax?

3) What is the GST rate? LPG is a 5% goods, not service

[shwetal oswal]

No need to charge gst, as the same will qualify as reimbursement of statutory dues.

[Shilpi Jain]

It is highly suggested that an agreement is entered with the residents to act as their pure agent while making available gas to them. It is possible to get the conditions of pure agent satisfied to be out of GST for the gas amount.

However, if those conditions are not satisfied then the gas would be liable at the rate the CAM charges are liable.

AI Summary

Reimbursement of statutory dues may exempt an apartment association's piped LPG recoveries from GST, subject to pure agent conditions. Characterisation of recoveries for centrally procured piped LPG by an apartment association determines GST liability: if treated as reimbursement of statutory dues or if the association qualifies as a pure agent under a resident agreement, the gas amounts may be excluded from taxable turnover; otherwise those recoveries form part of taxable supplies and may necessitate GST registration and tax collection.