IMPACT OF GST ON HOUSING
SOCIETIES
1. GST has implemented
in India from 1st July, 2017 and it is also applicable on Housing
Societies/RWAs whose gross receipt exceeds Rs. 20 lakhs per annum.
2. GST on maintenance
charges received from Members less than Rs. 5000 is exempt under GST. Hence, if
membership is grater then Rs. 5000, then it will costlier to the residents as
GST @18% will be payable.
3. Expenses which are
directly attributable to exempt receipt will be costly for the Societies as no
Input credit is allowed.
4. Services and Goods
received from unregistered dear will be taxed by the Society under Reverse
charge. Hence, more tax as well as compliance burden will be on the Societies.
5. The GST is
not applicable on municipal tax, property tax, water bill, non-agricultural
land tax, sinking fund, etc. All other charges, including repair fund, attract
the 18% GST levy.
6. If the
society’s maintenance amount is less than Rs 5,000 per member, but if the society’s
membership base is large and the total collection exceeds Rs 20 lakh per annum,
the society would be liable to pay GST.
ANALYSIS
REGISTRATION UNDER GST
Every
Society with an aggregate turnover of over Rs 20 lakhs is required to registered under ST. The aggregate
turnover includes all maintenance charges (except Municipal Tax), any
miscellaneous income, and includes Bank interests.
COMPOSITION SCHEME
The “Composite Scheme”
is available only for Manufacturing or Trading Sectors, Hence it is not
applicable on Housing Societies.
EXEMPTIONS
1.
As per S. No. 26 of
Exemption List notified by CBEC, “Contribution
received up to an amount of five thousand rupees per month per member for
sourcing of goods or services from a third person for the common use of its
members in a housing society or a residential complex”
Here, only Charges
for ”Sourcing of goods or services from third party, for the common use” are to
be considered. Thus, while water charges, common electricity charges, service
charges, repair fund / maintenance charges, insurance premium, etc, are
included while calculating the amount of Rs 5000/-.
2.
Water charges, may
be treated as Supply of Goods, and hence attracts GST at “zero % ” as per the GST
Rate table.
3.
Payment of
Municipal Tax may be considered as Payment on behalf of Member as an Agent, and may be treated as
outside the purview of GST and hence not taxable.
REVERSE
CHARGE
The
Good and/ or Services procured by Housing Society from any Unregistered Vendor,
GST has to be calculated and paid by the Society. Services and/ or Goods upto
Rs. 5000/- per day from unregistered Dealer is exempt for payment under Reverse
Charge.
INPUT TAX CREDIT
1.
The Societies are
allowed to avail Input Credits on GST paid by them to the various Vendors or through Reverse Charge.
2.
In case of Reverse
Charge, the credit is available only in the month next in which GST is paid
3.
Input Tax on Fixed
Assets is adjustable over a period of five years.
4.
Input
tax credit will be taken on proportionate basis on Exempt supplies and taxable
supplies
RETURNS
1.
GSTR -1 is required
to be filed on or before 10th of Each month.
3.
GSTR -3 is requited
to be submitted by 20th for payment of Taxes
4.
GSTR -9 an Annual
return to be filled by 31st December of next year
5.
GSTR – 9B [GSTR
Audit Report, if the aggregate turnover exceeds Rs 1 Cr] to be filed on or
before 31st of December.
