Whether Cooperative Housing Society is liable for registration under GST?

Whether Cooperative Society is liable for registration under GST?

When the aggregate turnover of a Cooperative Soc in a financial year exceeds twenty lakh rupees, such Cooperative Housing Society becomes liable for Registration under GST as per Sec 22. (1) of CGST Act. That means the collection of money maintenance charges by society exceeds Rs 20 Lakhs per annum then the Society need to be Registered.

It means that if the aggregate turnover (total receipts) of the Housing Societies which generally includes society maintenance charges from its members, receipts from investments, income receipts from advertisement board, receipts from mobile towers in premises, Share transfer fee from members, receipts from special purpose use of common area by member (marriage function etc) etc. Housing Society is liable to register if total of all the receipts (including exempted receipts) exceeds Rs. 20 Lakh in a financial year.

Thus Co-operative Housing Society or Residential Welfare Association who’s Turnover (collection money) crosses Rs 20 Lakhs per annum become liable for Registration under GST and should charge GST (CGST + SGST) from its members.

Further, if the aggregate turnover of such Housing Society/ is up to Rs 20 lakh in a financial year, then such supplies would be exempted from GST even if charges per member are more than Rs 7,500.

A Housing Society shall be required to pay GST on monthly subscription / contribution charged from its members if such subscription is more than Rs 7500 per member and the annual turnover of Residential Welfare Association by way of supply of services and goods is also Rs 20 lakh or more.

Input Tax Credit (ITC) Allowed :
If the Society becomes liable to pay GST, it is allowed to take Input Tax Credit under Sec 16 (1) of CGST Act subject to conditions for taking input tax credit. Housing Society is entitled to ITC in respect of taxes paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services such as repair and maintenance services – Lift AMC, Housekeeping, Security, Fire AMC, Repairs & Maintenance, Contract staff, Accounting & Auditing Services and other such services.

Applicability of Reverse Charge Mechanism
Tax liability under Reverse Charge as defined under Sec 2(98) of CGST Act also applicable. That means tax shall be payable by the Housing Society when supplies are received which are notified Services as per Sec 9(3) of CGST Act like services of Goods Transport Agency, Advocate Services etc and also supplies from Un-registered Person under Sec 9(4) of CGST Act. It is advisable to avoid receiving supplies from Un-registered persons. (RCM was suspended upto 31/3/2018 in case of Sec 9(4) )

Whether Eligible for Composition Scheme?
Housing Society is not eligible for Composition Scheme.

Statutory Compliances:
Under GST, a Society who’s Annual Turnover Crosses Rs 20 Lakhs need to be Registered and such GST Registered Housing Society

1) Need to Issue a Tax Invoice to its Members

2) Need to file 3 returns in a month.

GSTR-1 by 10th of following month for Outward Supply (Maintenance Charges)

GSTR-2 by 15th of following month for inward Supply (Expenses Side) and

GSTR-3 by 20th of following month for monthly consolidated return and

GSTR – 9 by 31st December of the Following Year

Thus in all 37 returns per year will have to be filled.

Also to maintain proper Records of Supply & Expenses and preserve such records for 72 Months.

Therefore, Services provided by Co-operative Housing Society comes under Taxable Supply and attracts GST.