Maharashtra AAR: Housing Society To Levy GST on Certain Threshold Limit

In recent times, the finance ministry circular has again announced that the resident welfare association having 20 lakh or more annual turnover or if they charging INR 7500 per month must pay GST on certain conditions. Also, the Maharashtra Appellate Authority for Advance Ruling (AAAR) for GST has stated the same for all the RWA.

A Mumbai based cooperative society has been charging a good amount of money for their basic maintenance such as electricity bills, car parking charges and common society laws. After this decision came out by AAAR, it has been justified for the State’s Authority of Advance Ruling (AAR) Get to know about AAR (Authority for Advance Rulings) under GST India along with its mechanism. Also, we have described its objectives, powers, orders, etc as earlier there were multiple issues with several housing societies and clubs who were charging the maintenance cost to the residents and members having more than INR 7500.

Housing Society services under the Finance Act 1994 states that the supply of services under GST Get to know GST provisions and rules on the free supply of goods. Also, we have included rules regarding ITC reversal on free supplies of goods and services. Read More is the same as of finance act 1994. As it may not qualify for services and would attract GST. However, the Tax Department said that the SC ruling relates to the Sales Tax regime where the concept of supply was not prevalent. It also said that collecting fees for the attainment of objectives as prescribed in the Society’s bylaws is nothing but business and activities carried out by the appellant do amount to supply, and hence are liable for GST.

As per the provisions of AAAR, “Provision of any facilities or any benefits by a club, association or society to its members against a subscription or any other consideration would be construed as a business.” Since the housing society is providing services against the consideration, named as ‘society charges’ in the furtherance of business, hence activities would be supplying and attract GST.