prpri GST Applicability on Co operative Housing Society GST Applicability on Co operative Housing Society

Applicability of GST on Cooperative Housing Society

Applicability  –

1. As per section 2(84) of CGST act persons include “a co-operative society registered under any law relating to co-operative societies;”.

2. As per section 2(17) term 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”.

From the above it is clear that GST is applicable on Co operative Housing Society.

Exemption  –

1. S.No. 80 of list of service at NIL rate  –

Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution

(a) as a trade union;

(b) for the provision of carrying out any activity which is exempt from the levy of Goods and service Tax; or

(c) 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.

 – From the above it is clear that collection towards Maintenance charges less than or equals to Rs. 5000 is specifically exempt form GST.

2. Tax payers having aggregate turnover in financial year up to 20 lakhs Annually are exempt from tax. This is common exemption available to all tax payer. 

3. Aggregate turnover means the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports of goods and/or services. Example of taxable supply are service charge, Non-occupancy charges, Interest on delay payment, Sinking fund, Parking charges, Transfer fee Example of exempt or nontaxable supply are Bank interest, FD interest, Water charges etc.

Summary  –  

*in case no. 3 GST is applicable on non member income only.  

GST Applicability on Various charges

However, if  charges are collected by the Society for generation of electricity by Society’s generator or to provide drinking water facility or any other service, then such charges collected by the society are liable to GST. 

Reverse charge Applicability –

Being a registered person, Society will have to pay GST on reverse charge basic for availing of services/goods from unregistered dealer.

Input Credit

Input credit can be claimed only on providing the taxable services. In case society providing both exempted & taxable services, then it can claim proportionate credit on common goods services.

Author Bio

Qualification: CA in Practice
Location: PUNE, Maharashtra, IN
Member Since: 12 Jan 2018 | Total Posts: 1

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  1. Kumar says:

    About Rs. 7500/- exempt limit, it is not clear, how it is to be calculated. Does it include few exempted charges eg. proportionate share of Property tax, water charges, electrical charges, NA tax etc. or exclude these?

  2. Shashi Bhargava says:

    The above note does not clarify whether registered to RWA will have to collect GST @18% from all members or only from those whose monthly dues are more than Rs7500 per month.

  3. vswami says:

    To ADD:

    “To enhance the exemption limit of Rs 5000/- per month per member to Rs 7500/- in respect of services provided by Resident Welfare Association (UNINCORPORATED / NONPROFIT entity) to its members against their individual contribution.”

    If were to focus on the words in FONT, the proposed change is likely to leave anyone, irrespective of independent level of intelligence /intellect, totally non-surplussed and in a dizzy. RWA , sought to be subjected to the levy is not an ‘incorporated entity’ within its legal meaning, or by any stretch of imagination. Again, to say that RWA to attract the levy must be a nonprofit (making) entity renders the prevailing confusion all more confounded. For, apparently, the faulty implication is that any RWA with a profit- making objective will not be subject to the levy. In effect, that dares to re-write mindlessly /tweak violently , the very premise- i.e. the only ground of the time honored legal ‘principle of mutuality’ , with no object of profit making, – that enables a claim for exemption from the levy.
    (OPEN to EDIT)

  4. vswami says:

    “To 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.’

    Looking back, going by memory, one thought , according to an earlier announcement, the levy was ‘in terms’ applicable only to ‘CHS’ !

    And for a critique sharing personal viewpoints, repetitively so, shared why the levy not should not , for more than one reason, apply to any other type of ‘housing societies, -such as ‘Owners’ Association’ or ‘apartments’ registered wrongly under the state ‘Societies Registration Act’ , instead of under the state “Co-operate (Housing !) societies Act , suggest to look through the previous posts herein or elsewhere , e.g. the website of itatonline and the personal Google Blogs @’swamilook’ in public domain ?!

    With no corresponding /consequential increase of the aggregate, from Rs 20 lakhs per annum, the per member enhancement is akin to athletic ‘hop step’ , with no ‘jump’ / or crossing the well half-way!

    Suggest to examine the displayed Report , – to ascertain is not there something amiss, grossly wanting in clarity ?!

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July 2021