GST Implication on Housing Society or Residential Welfare Association (RWA)


Co-operative Housing Societies are entities registered under the co-operative laws of the respective States. According to Section 2(16) of the Maharashtra Co-operative Society Act, 1960, “housing society” means a society, the object of which is to provide its members with open plots for housing, dwelling houses or flats OR if open plots, the dwelling houses or flats are already acquired, to provide its members common amenities and services. In other words these are a collective body of persons, who stay in a residential society as a collective body, they would be supplying certain services to its members, be it collecting statutory dues from its members and remitting to statutory authorities, maintenance of the building, security etc.


The definition of ‘Person’ in Section 2(84)(i) of the CGST Act, 2017 specifically includes a co-operative society registered under any law relating to co-operative societies. Thus a registered co-operative society is a person within the meaning of the term in the CGST Act.


A Society is akin to a club, which is composed of its members. So, can a service provided by a Housing Society to its members be treated as service provided by one person to another? The answer is yes. The following extracts of the GST law will make the position clear.

Definition of supply provided in section 7 of CGST Act, 2017 is inclusive definition, the expression of “Supply” includes,

All forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.

The term “Supply”, defined under section 7 of the CGST Act, 2017 is an inclusive definition and not an exhaustive one & therefore the activities of housing society for obtaining conveyance from the promoter (Builder), managing, maintaining, and administering the property of the society, raising fund for achieving the objects of the society, undertaking and providing and social, cultural, or recreation activities can clearly be considered as rendering of “Supply” of service being provided to its members.

Further Section 2(102) of CGST Act, 2017 specified “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.

Thus, on perusal of the above definition of the term “Service”, it is adequately clear that the term “Service” under GST Act, 2017 has been rendered a very wide connotation which is evident from the presence of the expression “anything other than goods, money and securities”. In view of this, it is clear that the activities undertaken by housing society would rightly be covered under the scope of the term “Service”.

From the definition of Supply it can be said that the activities to be considered as supply there should be a “Consideration” & “in the course or furtherance of business”.

The next question which arises is whether the activity of the society can be said to be in the course or furtherance of business.

As per definition of “Business” in section 2(17)(e) specifically 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

Hence from the above definition it is clear that activities of housing society to be considered as supply and even for course or furtherance of business.

The next question which raised is whether the activities (Supply of Service) by the society i.e. Person can be said to be made for a Consideration.

As per definition of “Consideration” in section 2(31)(a) includes 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.

From the above definition it can be construed that membership fee (in the name of maintenance charges) collected by Housing society from its members is also meant for meeting expenses for activities undertaken by the housing society to achieve the various object of the society as mentioned in By-laws of the society. Thus, membership fee (in the name of maintenance charges) collected by housing society from its members will be treated as “Consideration” paid for supply of service.


As per Section 22 of CGST Act, 2017 Every supplier shall be liable to be registered under this Act in the State or Union territory from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds the threshold limit as specified below,

For supplier engaged exclusively “Supply of Service” or “Goods & Service”

(a) Normal State:- Rs.20 Lakhs.

(b) Special Category State:-

Manipur, Mizoram, Tripura, Nagaland:- Rs.10 Lakhs.

Jammu & Kashmir, Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim, Uttarakhand:- Rs.20 Lakhs.

Further definition of “aggregate turnover” in section 2(6) of CGST Act, 2017 means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

However extract of serial no. 77 of Notification No. 12/2017- Central Tax (Rate)_28.06.2017 provide “NIL” rate of GST in case of service provided by following person,

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 7,500/- rupees per month per member (Threshold limit Increase from 5,000/- to 7,500/- per month per member wide Notification No. 2/2018- Central Tax (Rate)_25.01.2018) 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.

In view of the provision contained at (c) above, a society may be registered under GST, however if the monthly contribution received from members is less than Rs. 7,500/ – (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/ –

Certain statutory dues such as property tax, electricity charges etc. form part of the monthly maintenance bill raised by the society on its members. The question would arise whether such charges should be included while computing the monthly limit of Rs. 7,500/- in terms of clause (c) of Sr. no.77 of Notification 12/2017 -Central Tax (Rate)_28.06.2017.

As per clause (b) of the above exemption, exemption is available to housing societies for provision of carrying out any activity which is exempt from the levy of Goods and service Tax assuming that a housing society is a non-profit registered entity; and property tax and electricity is exempt from the levy of GST. Thus, charges, collected by the society on account of property tax, electricity charges and other statutory levies would be excluded while calculating the limit of Rs. 7,500/-.

Further, the question would then arise that if the monthly bill is say Rs. 9,000/- (and the same is on account of services for common use of its members), will GST be applicable on Rs. 9,000/- or Rs. 1,500/- which is in excess of Rs. 7500/-. In such cases, exemption is available up to an amount of Rs. 7,500/- and GST would be applicable on the entire amount of Rs, 9000/- and not on [ Rs. 9000 – Rs. 7500] = Rs. 1500/-.

However Section 23 of CGST Act, 2017 provide that the following persons shall not be liable to registration,

(a) Person engaged in exclusive supply of goods, service, or both which are not liable to tax under GST Act, 2017.

(b) Person engaged in exclusive supply of goods, service, or both which are wholly exempt from tax under GST Act, 2017.

(c) An agriculturist, to the extent of supply of produce out of cultivation of land.

Thus, if the turnover of the society is less than Rs.20 Lakhs or even if the turnover is beyond Rs. 20 lakhs but the monthly contribution of individual members towards maintenance is less than Rs. 7,500/- (such services being exempt) and the society is providing no other taxable service to its members or outsiders, then the society (essentially Exclusively providing wholly exempt services) need not take registration under GST.

From the analysis of above extract of provision of law, Housing Society or Resident Welfare Association (RWA) required to register if following BOTH the conditions are satisfied.

1) Annual turnover is more than threshold limit (i.e. 20 Lakhs in Maharashtra) AND

2) Monthly maintenance charges is more than Rs. 7,500/- (Exclude the property tax, electricity charges and other statutory levies) per month per member.


Following things to be Include or Exclude while calculating limit of Rs. 7,500/- per month per member.

Include:- Sinking Fund, Maintenance and Repair Funds, Car Parking funds, Non-Occupancy Funds.

Exclude:- Property Tax {Municipal Corporation of Greater Mumbai (MCGM)}, Water Tax {Municipal Corporation of Greater Mumbai (MCGM)}, Electricity Charges , Non- Agricultural Tax (Maharashtra State Government)

Thus, those item will be considered for Rs. 7,500/- which are purely for sourcing of service for its members, and any expenses collected by society on behalf of other person or levied by some statue would be excluded while consideration of limit of Rs. 7,500/-.


Housing society or RWAs are entitled to take ITC of GST paid by them on,

1) Capital goods (generators, water pumps, lawn furniture etc.),

2) Goods (taps, pipes, other sanitary/hardware fillings etc.) and

3) Input services such as repair and maintenance services.


As per general business sense, a person who owns two or more residential apartments in a housing society or a residential complex shall normally be a member of the RWA for each residential apartment owned by him separately. The ceiling of Rs.7,500/- per month per member shall be applied separately for each residential apartment owned by him.


SAC Code:-999598 (Home owners associations)

GST Rate:- 18%


AAR : In re Apsara Co-operative Housing Society Limited (GST AAR Maharashtra); Advance Ruling No. GST-ARA- 21/2019-20/B-34; 17/03/2020

In the above case applicant is not satisfied with order passed by advance authority and filed appeal with AAAR.

AAAR: In re Apsara Co-operative Housing Society Ltd. (GST AAAR Maharashtra); Order No. MAH/AAAR/RS-SK/28/2020-21; 05/11/2020

The order passed by AAAR is also akin to ruling passed by AAR.


The exemptions given ensure that there would be no tax burden on smaller societies where the monthly contribution of the individual members does not exceed Rs. 7,500/-. The GST burden shifted to posh area societies where maintenance bill is more than Rs. 7,500/- per month per member.


Sincere efforts have been made to make this article without any error. In case of any errors that you may want to bring to the notice of the author, queries or suggestions, the author may be reached at the following mail addresses, E mail:- [email protected]

Disclaimer: This is strictly my personal opinion. Above discussion cannot be considered as our professional or legal advice. Users shall consider legal provisions or take advice from experts before taking action on it.

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May 2021