Introduction

Co-operative housing societies are entities registered under the co-operative laws of respective states. It is a society which has the objective to provide open plots for affordable housing, dwelling houses or flats or any common amenities and services to its members. In simple words it is a collective body of persons who stay in residential society, who supply services to its members like collecting statutory dues from its members and remitting it to authorities, building maintenance, security etc.

Is GST applicable to Co-operative housing society

As per definition of supply under GST- Supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.

Now it is important to understand the term business under GST- Business includes provision by a club, association, society, or any such body (for subscription or any other consideration) of the facilities or benefits to its members.

So, it is clear from the above discussion that Co-operative society also falls under GST. And to be specific definition of person under CGST Act includes co-operative society.

Registration requirement

If the aggregate turnover of housing society is above 20 lakhs, it needs to take registration under GST. For special category states limit is rupees 10 lakhs. To calculate aggregate turnover-society maintenance charges, receipts from investments, advertisements, share transfer fee from members, income from special use of common area of society like- marriage, are considered mainly.

Taxability

Co-operative housing society is liable to collect tax @18%. A housing society is required to pay GST on monthly subscription charged from its members if such subscription is more than 7500 rupees per member. But it is to be noted that if aggregate turnover of society is up to 20 lakhs, then supplies would be exempted even if charges per member is more than 7500 rupees. To make it clear let us have a look on summary table below-

Sinking fund, repairs and maintenance fund, car parking charges, interest on late payment, non-occupancy charges, drinking water facility are the main charges collected by the co-operative society for the supply of services to its members. GST is applicable on all these charges collected by society.

Exemption

As we all know, services provided by Central government, State Government, Union territory or Local authority to a person other than business entity is exempt from tax. So, property tax, water tax Non-agricultural tax, electricity charges which are collected under statutes are exempted from GST.

It is to be noted here that if any charges are collected by co-operative society like- additional electricity charges for electricity generation through society's generator, then it is taxable under GST.

Input tax credit

If housing society is liable to pay GST, then it can also avail the benefit of input tax credit. It can avail benefits in respect of capital goods (generators, furniture), input (taps, other sanitary) and input services like housekeeping, lift service, staff and other related services.

Reverse charge mechanism

Reverse charge applies to housing society, in case it avails services notified in section 9(3) of CGST Act. For example- goods transport agency, advocate services. And supplies from unregistered supplier as mentioned in section 9(4) are also applicable to co-operative housing society.

GST compliances

Housing society can register under GST as normal taxpayer only. In other words, composition scheme is not available for housing society. So, it is required to file monthly returns like GSTR-1 and GSTR 3B. It is also required to maintain books of accounts as mentioned under the CGST act (we have discussed that in the accounts and records article) and issue invoices to its members.

Conclusion

So, from the above article we can conclude that society is enjoying many exemptions, and it can also avail benefit of ITC. As the government wants to provide affordable housing to every citizen of our country.

Important sections/notifications