A housing society is a society which allocates house plots and provides housing facilities and amenities to its members and residents.
Applicability of GST
According to the central goods and services act, a taxable person is the one who is a supplier of goods and services to another person and is not exempted from the purview of GST. According to GST, a taxable person can be a natural person, HUF, a company or a firm, a limited liability partnership, a local authority, central or statement government, a trust or a society registered under Societies registration act, 1860, a body of individuals or an association of persons (whether incorporated or not within or outside India). Hence, a corporate society is liable to pay GST if registered under societies act.
Also, as per CGST act 2017, business includes the provision by a club, society, association or any such body which provides benefits and facilities to its members. Hence, a housing society is liable to pay tax under GST.
Compliance requirements for housing societies under GST
All the housing societies with revenue over 20 lakhs are liable for GST registration. However, if the monthly contribution received from its members does not exceed Rs. 7500, no GST will be charged by the housing society. Moreover, other charges like property tax, electricity charges are exempted from tax under GST and are not included in calculating Rs. 7500.
Also, if the aggregate turnover of the society doesn’t exceed 20 lakh in a financial year even if the monthly charges from each member is more than Rs. 7500, it would be exempted from GST.
Applicability of GST on charges collected by society
The following charges are normally collected by the housing society from its members:
- Services that are provided by the central government, state government, local authority or the union territory to a person except corporate entity is exempt from tax. If the housing society collected the water and property tax on the behalf of the Municipal Corporation of Greater Mumbai (MCGM), these charges are exempted from tax under GST.
- GST is not imposed on charges such as non-agricultural tax, electricity charges etc. collected from the individual flat owners other under statuses. However, if these are collected by society as a means of providing electricity and water facilities, the same will be charged in GST.
- Other charges that will attract GST includes the sinking fund, repairs, and maintenance fund, simple interest for late payment, non-occupancy charges, parking charges etc.
Thus, it is clear that small housing society with a monthly contribution by each member not exceeding Rs 7500 won’t attract GST whereas the societies with high revenue base or collecting monthly contribution more than Rs. 7500 will come under GST ambit.
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.
ITC of Central Excise and VAT paid on goods and capital goods was not available in the pre-GST period and these were a cost to the RWA.
TAX RATE APPLICABLE ON RWA
As per notification 11/2017 for services related to Services furnished by business, employers and professional organizations Services, Services furnished by trade unions & Services furnished by other membership organizations falling under SAC 9995 the Central Tax Rate is 9%. Similar Provisions are made under SGST Acts also. Therefore there will a levy of 18% (CGST @ 9% + SGST @9%).
Housing Society is not eligible for Composition Scheme.
RETURNS AND DUE DATES
All the Registered Persons (Normal Registration) will have to file 3 returns in a month.
GSTR – 1 by 10th of following month – Towards Outward Supply (Maintenance Charges)
GSTR – 2 by 15th of following month –Towards Expenses Side and
GSTR – 3 by 20th of following month – Monthly consolidated return and
GSTR – 9 by 31stDecember of the Following Year.
GSTR-3B return will have to be filed by all taxpayers in addition to GSTR-1, GSTR-2 and GSTR-3 return. Earlier, GSTR-3B returns were to be filed for the month of July to December 2017.
IN 23rd council meeting, it has been announced that GSTR-3B return must be filed for all months from July 2017 to March 2018. The due date for GSTR-3B return will be the 20th of every month.
FEE FOR LATE FILLING OF GST RETURN
When a Registered Dealer misses filing GST Returns within DUE DATE a late fees is levied by the government.
If GSTR-1 is not filed within due date you will be liable to pay late fees of Rs. 200 per day of delay
Records and Accounts
Maintain proper Records of Supply & Expenses and preserve such records for 72 Months.
- 25th GST Council Meeting enhance the exemption limit of Rs 5000/- per month per member to Rs 7500/- in respect of services provided by Resident Welfare Association (unincorporated or nonprofit entity) to its members against their individual contribution.
- The late fee for delayed filing of GSTR-1 is being reduced to Fifty Rupees per day and shall be Rupees Twenty Five in case of Nil returns.
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