In re Kabra Galaxy Star 3 Co-Op Housing Society (GST AAR Maharashtra)
The question asked is, whether members of the society will be at par with the other individual flat owners who are not members.
Section 97(2), which encompasses the questions, for the ruling by the AAR does not cover the question raised by the applicant. It is therefore felt that this authority does not have jurisdiction to pass any ruling on such matters/questions.
In view of the above discussion, we reiterate that the questions posed before us are not the questions in respect of which an Advance Ruling can be sought under the GST Act. In view thereof, we find that the impugned application is not maintainable. No proceeding of Advance Ruling under the GST Act lies in the instant case.
Question raised on ‘assessment of supplies based on taxability’ does not fall within AAR’s jurisdiction
FULL TEXT OF 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”] by KABRA GALAXY STAR 3 CO–OP HOUSING SOCIETY , the applicant, seeking an advance ruling in respect of the following question.
Individuals who own flails in a society but have opted not to become the member of the society.
Will they be at par with the other individual flat owner who have opted for the membership of the society, for GST exemption of Rs. 7500/- , or Will be treated as outsider and shall be liable for GST without exemption of Rs. 7500/-.
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-
Definitions under GST Act which attracts the taxability to co-operative societies
Section 2(84) “Person” includes a co-operative society registered under any law relating to co operative societies or Society as defined under the Societies Registration Act, 1860 Sec 2(31) “Consideration” in relation to the supply of goods or services or both includes (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government
Sec 2(17) “Business” includes provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; A co-operative society (being a person as defined above) provides services to its member in the form of facilities or benefits to it member (in course of business) for a consideration. Based on above definition and concept of supply co-operative society also gets covered under GST. A Housing Society / Residential Welfare Association shall be required to pay GST on monthly subscription /contribution charged from its members if such subscription is more than Rs 7500 per member and the annual turnover of Residential Welfare Association by way of supply of services and goods is also Rs 20 lakh or more.
The model bye laws vide 97th amendment to MAHARASHTRA COOPERATIVE HOUSING SOCIETY’S
Modified GR dated 2013 and adopted by the said society says on page no 13 SUB head h) Member is the person who at the time of registration or even after registration of the Society accepted by same society and who holds property rights individually or jointly. The said copy in Marathi is attached herewith.
Our interpretation
Exemption of Rs.7500 per month is available to its members only, VIDE notification no.11/2017 State Tax (Rate) dated 29th June 2017.
Non-member will not be eligible for basic exemption of Rs. 7500/
Hence GST will be payable by them on taxable services without basic exemption.
Additional submissions
PRESENTATION BEFORE ADVANCE RULLING AUTHORITY
A Co-op Society provides services to its members in the form of facilities or benefits for a consideration. Based on concept of supply, Co-Op Society also gets covered under GST. Maintenance Charges of Hsg. Society covers Taxable & Exempted Services.
Taxable Services:
CBEC in FAQ; has clarified that Sinking fund, Repair & Maintenance Fund, Car Parking Charges, Non Occupancy Charges or Interest for late payment would be covered by GST, as these are collected by the CHS for supply of services meant for its members.
Exempted Services:
Services provided by the Central Government, State Government, Union Territory or Local Authority to a person other than business entity is exempted from GST. So Property Tax, Water Tax, N.A. Tax, Electricity Charges etc., when collected by CHS on behalf of Municipal Corporation or under statutes from Individual flat owner then GST is not leviable.
Sec. 2(17)
Business includes provision by a club, association, society or any such body (for a subscription or any other consideration) of the facilities or benefits to its members.
Definition of Member in Bye Laws of Housing Society :
“Member” means a person joining in an application for the Registration of a Co-operative Housing Society, which is subsequently registered, or a person duly admitted to Membership of a Society after Registration and who holds the right, title and interest in the property individually or jointly.
A) Class of Members :
i) Members, including Associates Members &
ii) Nominal Members
B) Eligibility for Membership:
