GST ON HOUSING SOCIETIES

According to this principle, an association and its members are not distinct entities but one and the same in their mutual dealings, meaning no actual "supply" or taxable transaction occurs between separate parties. The court held that GST requires two distinct parties for a valid taxable supply, which is absent in mutual associations like housing societies.

- By CA Gaurav Kenkre

CA Gaurav Kenkre is a CA in practice for the last 11 years. He is a regular speaker at various professional organizations, trade bodies, MNCs and Government bodies. He also writes regularly in local as well as national publications. Besides this he holds various positions in bodies such as ICAI, GCCI, College bodies, Rotary etc.

Goods and Services Tax (GST) on housing societies is an important topic for residents and administrators managing cooperative housing complexes in India. Under GST, housing societies are required to comply with tax rules based on certain thresholds related to their turnover and the monthly maintenance charges collected from members.

GST registration is mandatory for any person whose annual turnover exceeds Rs. 20 lakhs. However, there is also a provision which states that even if the turnover is above Rs 20 lakhs, then there is no need to register for GST, if the entire turnover is exempt.

Monthly maintenance charges collected for common amenities, by societies, from its members, are exempt if such charges are upto Rs 7500 per month. Most smaller societies have charges below this limit. Thus, even if their overall turnover is above Rs 20 lakhs, they donot trigger the clause of registration, since their entire turnover is exempt (i.e. all monthly maintenance charges) are below Rs 7500 per month. In a way, the exemption available per member is Rs 7500 per month x 12 months Rs 90000 per member per year.