Approximately 70,000 co-operative Housing Societies have noticed crossing an annual turnover of Rs. 20-lakh in Mumbai, Maharashtra have to register under new indirect tax regime, as per the report generated by The Times of India. As detailed by the senior co-operative officials, 50,000 are in the Mumbai Metropolitan Region (MMR) from the 70,000 such societies.
The transfer fee paid by incoming and outcoming members from the concerned societies is meant for the society’s annual turnover.
Under the Maharashtra Co-operative Societies Act, the model by-laws place a limitation of Rs 25,000 on this kind of transfer fees. Although, in actual, the limit has overgrown and reaches to lakhs, as the report says.
Ramesh Prabhu, chairman of the Maharashtra Societies Welfare Association mentioned the newspaper, “In such instances, any transfer fee paid to the society by the new owner on an exchange of ownership of flat will be taxable under GST at 18%.”
After registering under the new tax regime, it should be obeyed as per the provisions mentioned under the reverse charge mechanism.
Under the reverse charge mechanism, if the Co-operative Housing Societies pays to unregistered service providers which are electricians, plumbers, and cleaners, society, in that case, has to pay 18% GST on that kind of transactions and as per the norms they have to furnish relevant forms on the GSTN portal as well.
The government has mentioned previously that the GST will be charged on maintenance fees obtained from the house owners of the society if the annual collection of society stands at Rs. 20 lakh or more and the monthly maintenance fee paid by each member is more than Rs 5,000.
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