In re Forest County Co Operative Housing Society Limited (GST AAR Maharashtra)
Question 1. Applicability of GST on Repair and Maintenance Fund and Sinking Fund.
Answer: – In view of the discussions made above, it is held that GST is applicable on Repair and Maintenance Fund and Sinking Fund.
Question 2. Whether or not exemption limit of Rs.7500/- per month per member is applicable on above two components of maintenance bill by a Housing Co-operative society to members of society.
Answer:- In view of the discussions made above it is held that if the gross amounts collected by the applicant in their bills/invoices, exceed Rs.7500/- then exemption limit of 7500/-is not applicable on two components of maintenance bills as asked in question above. It is explained in para 5.12 and the table mentioned in above order.
FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively] by M/s. FOREST COUNTY CO-OPERATIVE HOUSING SOCIETY LIMITED, the applicant, seeking an advance ruling in respect of the following questions.
1. Applicability of GST an Repair and maintenance fund and sinking fund
2. Whether or not exemption Limit of Rs.7500/- per member is applicable on above two components of maintenance bill by the housing co-operative Society to members of society.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression `GST Act’ would mean CGST Act and MGST Act.
2. FACTS AND CONTENTION – AS PER THE APPLICANT
The submissions, as reproduced verbatim, could be seen thus-
“Total bill raised by a housing Co-operative society if for example. Rs. 6500/- per month per member, break up of Rs. 6500/- is as below:
1) Repair and maintenance fund: – Rs. 1500/-
2) Sinking Fund: – Rs. 1500 /-
3) Other Maintenance charges: – Rs. 3500/-
Total Maintenance Bill (1+2+3) – Rs. 6500/-
Is society liable to collect any GST in above scenario. Or since total maintenance bill in less than Rs. 7500/-, no GST is required to be charged and collected by housing co-operative society?
A. Statement of relevant facts having a bearing on the Questions (s) raised.
Forest County !lousing Co-operative society is an unincorporated body and a non-profit entity registered under THE MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960. It is rcgistered under GST since the aggregate turnover is more than 20 lakhs. It collects Maintenance charges from its members on a quarterly basis for providing services and goods for the common use of its members.
Monthly bill (including Repair and Maintenance fund and Sinking Fund) is less than Rs. 7500/- per month per member.
B. Statement containing the Applicant’s interpretation of law and /or facts.
Our interpretation of law with reference to “Circular No. 109/28/2019- GST New Delhi, the 22nd July, 2019” Compliance requirements for housing societies under GST: If the turnover of housing society is above 20 Iakhs, it needs to take registration under GST in terms of Section 22 of the CGST Act, 2017. However, taking registration does not mean that the housing society has to compulsorily charge GST in the monthly maintenance bills raised on its members. Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017 at sr.no.77 provides for the following exemption to housing societies:
“In view of the provision contained, a society may be registered under GST, however if the monthly contribution received from members is less than Rs. 7500/- (and the amount is for the purpose of sourcing of goods and services from a third person for the common use of its members), no GST is to be charged by the housing society on the monthly bill raised by the society. However, GST would be applicable if the monthly contribution exceeds Rs. 7, 500/-“. Forest county housing co-operative society (FC) status:
Our turnover is more than 20 lakhs and hence we are required to be registered under GST law and which we are compliant with.
Maintenance Charges per month per member is within Rs. 7,500/- and hence FC is aired to collect any GST.
All the charges including Sinking Fund and Repair and Maintenance Fund are collected from members for providing services and goods for common use of its members in a housing society or a residential complex.
So in our view, there is no liability on Forest County to collect any GST from its members.
03. CONTENTION — AS PER THE CONCERNED OFFICER:
The submissions, as reproduced verbatim, could be seen thus-
Officer Submission dated 07.01.2020
Question; – Total bill raised by a housing Co-operative society if for example. Rs. 6500/- per month per member, break up of Rs. 6500/- is as below:
1) Repair and maintenance fund: – Rs. 1500/-
2) Sinking Fund: – Rs. 1500 /-
3) Other Maintenance charges: – Rs. 3500/-
Total Maintenance Bill (1+2+3) – Rs. 6500/-
Is society liable to collect any GST in above scenario. Or since total maintenance bill in less than Rs. 7500/-, no GST is required to be charged and collected by housing co-operative society?
Answer: – As per circular no. 109/28/2019-GST dated 22/07/2019 (F No 332/04/2017-TRU Govt of India Ministry of Finance, Department of Revenue (Tax research Unit) in the Sr. No I and 2 which is mentioned as follows.
