If the turnover of the housing society is over ₹20 lakh and/or it levies more than ₹20 lakh in aggregate annual maintenance charges in a financial year, it needs to take registration under GST laws.
If the society’s monthly maintenance bill is more than ₹7500 per unit, 18% GST is applicable on the entire amount.
Property Tax, Water Tax, Municipal Tax, Non-Agricultural Land Tax paid to the state are exempt from GST.
GST is also applicable on receipt of certain services under reverse charge mechanism.
Sinking Fund, Maintenance and Repair Funds, Car Parking funds, Non-Occupancy Funds – all if collected as part of maintenance and not as deposits, interest from late payments, are not exempt from GST since they are considered charges collected by the society for the supply of services to members.
GST is levy able on Water/electricity charges for common areas and common services like clubhouse, swimming pool, along with parking charges, common property tax, payments for repair and maintenance, security, admin, accounting, Non Occupancy charges.
Housing Societies will avail the benefits of ITC which means they will receive a tax deduction if they pay taxes on:
- Repair and maintenance
- Capital Goods (generators, lawn furniture, water pumps, etc.)
- Other Goods (taps, pipes, hardware, construction materials)
GST compliance
- Monthly filing of GSTR 1 or IFF whichever is applicable depending on the turnover.
- Monthly payment and filing of GSTR 3B
- Monthly reconciliation of GSTR 2A and purchases.
- Annually filling of GSTR 9 and GSTR 9C if turnover is more than 5cr.
Interest on late Payment of GST is 18%
Interest on ineligible ITC claimed is 24%
Penalty as derived in the assessment order by the officer will be Rs. 10000 each for SGST, CGST and IGST, or 10% off the demand raised whichever is higher.
This information is general in nature and is not intended to address specific facts and circumstances. Readers must seek independent advice and not act upon information contained here.
Rohan Mehta – [email protected]
Disclaimer: The information is of a general nature and is not intended to address specific facts and circumstances. The author of this article shall not be liable in any manner whatsoever for any action taken relying on information contained here. Readers must seek independent advice and not act upon information contained here.
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