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.
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.
The “Composite Scheme” is available only for Manufacturing or Trading Sectors, Hence it is not applicable on Housing Societies.
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.
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
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.