1. GST On Housing Society Edition-02
CA Nikhil Malaiya
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2. What is Co-operative Society?
Meaning of Society
society that work on the joint ownership principle, society is the owner property and members have certain share
Which Act Govern Society
State Co-operative Societies Act or by Multi-State Cooperative Societies Act, 2002.
Type of Society
Housing Cooperative, Social Cooperative, Cooperative Banks etc.

3. Few term in GST related to Housing Society
As per Section 2 Sub Section (84) clause (i) “person” includes a co-operative society registered under any law relating to co-operative societies
- 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;
- admission, for a consideration, of persons to any premises;
As per section 2 sub section (17) provide “business” includes

4. Whether Society is Liable to GST?????

5. What is Definition of Aggregate turnover?
As per section 2 sub section (6) “aggregate turnover” 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

6. What is Exempt Supplies?
As per Section 2 sub section (47) :
“exempt supply” means supply of any goods or services or both
Which attracts nil rate of tax or
which may be wholly exempt from tax under section 11 CGST Act, or under section 6 of the IGST Act, and
Includes non-taxable supply;

7. What is supply?
7. (1) For the purposes of this Act, the expression “supply” includes––
(a) 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;
(b) import of services for a consideration whether or not in the course or furtherance of business;
(c) the activities specified in Schedule I, made or agreed to be made without a consideration; and
(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.

8. Activity of Housing Society?
Formation of Society on completion of building
Allotment of Share to its member
Contribution from member for maintenance of Building
Now Biggest question is that whether Exemption is available on this contribution from Member?

9. Whether any Exemption is allowed to Housing Society?
Entry No. 77 of Notification No. 12/2017- Central Tax (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.

10. Clarification as Circular No.175/01/2014 - Service Tax
Query
(i) In a residential complex, monthly contribution collected from members is used by the RWA for the purpose of making payments to the third parties, in respect of commonly used services or goods [Example: for providing security service for the residential complex, maintenance or upkeep of common area and common facilities like lift, water sump, health and fitness centre, swimming pool, payment of electricity Bill for the common area and lift, etc.]. Is service tax leviable?
(ii) If the contribution of a member/s of a RWA exceeds five thousand rupees per month, how should the service tax liability be calculated?

11. Clarification
Exemption at Sl. No. 28 (c) in notification No. 25/2012-ST is provided specifically with reference to service provided by an unincorporated body or a non-profit entity registered under any law for the time being in force such as RWAs, to its own members.
However, a monetary ceiling has been prescribed for this exemption, calculated in the form of five thousand rupees per month per member contribution to the RWA, for sourcing of goods or services from third person for the common use of its members.
If per month per member contribution of any or some members of a RWA exceeds five thousand rupees, the entire contribution of such members whose per month contribution exceeds five thousand rupees would be ineligible for the exemption under the said notification. Service tax would then be leviable on the aggregate amount of monthly contribution of such members.

12. FAQ
Whether contribution for 2 month received together above 5000 is eligible for exemption?
No, Exemption is per month per member, so cover in exemption
Example
Maintenance charges is Rs p. m. but one of the member has paid for two month at a time. Not cover in exemption.

13. FAQ
Whether penalty or Interest portion is also to be consider for the purpose of exemption?
As per section 15 sub section 2 clause d- The value of supply shall include Interest or late fee or penalty for delayed payment of any consideration for any supply
Example
Maintenance charges is Rs. 4500
Interest on delayed payment- 1000
Total consideration paid=5500
Not eligible for exemption.

14. FAQ Yes, we can claim exemption in 2nd month.
In the 1st month Members contribution is 6000 and from next month it is whether exemption is allowed in 2nd month.
Yes, we can claim exemption in 2nd month.

15. FAQ
What if Service is provided to specific member and not for common use of Its Member???
Not cover under Notification and therefore liable to tax?
Example
Charges for use of terrace for marriage of one of the member.

16. What If to a particular member specific charge + AMC, how taxable?
FAQ
What If to a particular member specific charge + AMC, how taxable?
Specific charge= Taxable
AMC= subject to exemption
Example
Charges for use of terrace for marriage of one of the member=10000
Charge for AMC=4500
Total bill=14500
Eligible to exemption of 4500

17. Whether Liable to Register
Taxability of Housing Society
CASE
Contribution from Member
Other Receipt
Below 5000
5000 or above
Exempted Receipt
Taxable Receipt
Total Receipt during the FY
Whether Liable to Register
Tax Payable On
Contribution
No. of Member
Total Receipt
(eg. Interest Income)
(Eg. Renting of Tower)
CASE I
3000
700 No
CASE II
500
600000
CASE III
Yes
CASE IV
5000 50
250000
CASE V
200
CASE VI
350
CASE VII
400000
CASE VIII
CASE IX
CASE X
CASE XI
300
900000
100
500000

18. Transaction of Housing Society

19. 1. Property Tax What is Property Tax?
Collection of property tax is statutory levy by a municipal corporation or a local authority under the Constitution of India.
On what basis it is charge?
The property tax is levied on sq. ft. basis and the owner of the property is liable to pay the same.
What is role of Society in This?
A society is a mere collecting agent and pays the same to the authority.
Whether it is Taxable?
As Society act merely as Pure Agent, no service portion is involved. Therefore not Liable to tax. However it is advisable to have separate invoice for this.

20. 1. Property Tax cont.. What About Property tax on common area?
This is taxable subject to limit of exemption of 5000.
What about property tax on parking which is sold to member?
As it is separately identifiable for each member, this is pure agent service.

21. 2. Sinking Fund/ Building
What is Sinking Fund/building fund?
Fund collected for development of building in future
Whether it is Taxable?
It is used by society in future for its member for development. Therefore it will be treated as service and will be taxable on receipt basis.
Whether it is covered for calculating exemption limit?
Yes, as it is contribution from member for common purpose it will be counted for 5000 limit.

22. 3.Maintenance and Repair charges
What is Maintenance and Repair charges?
‘Maintenance’ as the name suggest is the amount collectively reimbursed to the society to upkeep and maintain the building and premises on regular basis.
What type of Charges are include in this?
Electricity charges for common areas, watchman or security charges and other miscellaneous expenses incurred by the society including accounting, audit etc. is part of maintenance charges.
Whether it is Taxable?
Yes, subject to to limit of exemption of 5000.

23. 4. Share Transfer Fees What is Share and Transfer Fees?
Share transfer fees are the amount charged by the society for transfer of shares by member
Whether it is Taxable?
Yes, it is taxable.
Whether it is covered for calculating exemption limit?
No, it is not cover in exemption as it is not contribution for sourcing of service from third person

24. 5. Non Occupancy Charges What is Non occupancy Charges?
Non occupancy charges are charges levied by a housing society only when a flat or unit is let out by its members
Whether it is Taxable?
Yes, it is taxable.
Whether it is covered for calculating exemption limit?
No, it is not cover in exemption as it is not contribution for sourcing of service from third person

25. 6. Parking Charges What is Parking Charges?
Charges to regulate the parking place between the members and providing of space by use of vacant land belonging to the society for a consideration.
Whether it is Taxable?
Yes it is purely service and thus it is taxable in Nature.
Whether it is covered for calculating exemption limit?
No as there is no 3rd person is involved in this service.

26. 7.Water Charges What is Water Charges?
the society is not selling the water to its members. It is just providing the pipeline to deliver water in the members’ premises
What is role of Society in This?
Billing by Municipal corporation in the name of society and then on some basis society collect charges from member.
Whether it is Taxable?
Yes, as it is again contribution from member for common use of its member. This is taxable subject to limit of exemption of 5000.
What about common Water used like Swimming Pool?
It is also taxable subject to limit of exemption of 5000.
What if different meter is provided for each member?
It will fall under pure agent service, so not taxable.

27. 8. Charges for use of club house, swimming Pool, etc
What is Water Charges?
These are specific services by the society to the member opting for such facilities.
Whether it is Taxable?
Yes, subject to exemption limit of Rs

28. 9. Other Transaction Rental for Mobile tower
Renting Service Liable to tax at
Hording charges
Advertisement Charges Liable to Tax
Use of terrace for function of non member or member
Renting Service Liable to tax
Interest on default charges
Not covered in exemption as it is not interest on advances. Therefore liable to tax

29. Valuation Rule for Pure Agent
Supported by: Circular No.175 /01 /2014 – Service As per Rule 7 of VALUATION Rule Value of supply of services in case of pure agent: The expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely:- (i) the supplier acts as a pure agent of the recipient of the supply, when he makes payment to the third party on authorization by such recipient; (ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account.

30. Whether count for 5000 Limit
Taxability example
Particulars
Whether count for 5000 Limit
Case I
Case II
Case III
Case IV
Maintenance and repair charges
Yes
4500
4000
Interest And penalty on above
300
Property tax (Considering Pure agent) No
1000
Sinking Fund
500
Share transfer fees
200
Non-occupancy charges
Parking Charges
Water charges
Club house, swimming charges
Total Receipt
4800
5800
7300
Receipt eligible for exemption
5300
Exemption Allowed?
Exempted portion
Non Taxable portion
Taxable portion
6300

31. Reverse Charge Mechanism

32. Reverse Charge Mechanism
RCM Means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both
Cases where RCM Apply
Notified Goods or service
Any type of Taxable Goods or services purchase/ received from Unregistered person
Import of Goods

33. Illustrative List of Exempted Expenses where tax on RCM is not require to pay:
Interest
Travelling Expenses*
Electricity Expenses
Salary & Wages
Fuel (for generator)
Government Fees

34. Purchase from Unregistered Person (Section 9(4))
If Society is registered
Taxable purchase from unregistered
Liable to pay tax on reverse charge basis

35. Applicability of RCM to Housing Society (Section 9(3))
Entry 3 of RCM:
100% RCM in case of Services provided or agreed to be provided
by an individual advocate or firm of advocates
by way of legal services, directly or indirectly
to Business Entity (If turnover exceed Lakh)
Being Housing Society is treated as business entity RCM is applicable for housing society in above case

36. Illustrative List of Input service on Which Housing society can claim ITC:
House Keeping service
Repair Service
Swimming pool Contractor
Goods purchase for Club or garden
Security Service
Accounting and Audit service
Refreshment service
Legal Service

37. Illustrative List of Expenses where tax on RCM is require to pay:
Rent
Commission Payment
Printing and stationery
Office maintenance
Vehicle maintenance
Computer maintenance
Legal Fees
Consultancy Fees
Professional Fees
Audit Fees, etc

38. Applicability of RCM to Housing Society
Entry 2 of RCM: 100% RCM is applicable in case of Services provided by a goods transport agency (GTA) in respect of transportation of goods by road to: (a) any factory registered (b) any society/Co-op Society (d) any person registered under GST (e) any body corporate/ AOA (f) any partnership firm registered or not (g) Casual taxable

39. Reverse Charge Mechanism
Mr. Y who is liable to pay tax under reverse charge mechanism & is opting for composition scheme, has to pay tax whether at the composition rates or at the normal rates applicable for such services?
Mr. Y
Service Receiver opting composition scheme
Mr. X
Service provider
Answer: Then under RCM, Mr Y is liable to pay tax at the rates specified and not at the composition rates applicable for composition scheme.
Whether Mr. Y liable to pay tax under RCM can avail its ITC for payment of RCM tax liability?
Mr. X
Service provider
Mr. Y
Service Receiver opting composition scheme
Answer: When a person is liable to pay tax under RCM, then he cannot avail the ITC of itself for the payment of output tax liability under RCM.
Thus no ITC can be utilized for payment of tax under RCM.
CA Nikhil Malaiya

40. Service Receiver opting composition scheme
Reverse Charge Mechanism
No ITC can be availed for one opting for composition scheme. So whether the person liable to pay tax under RCM can avail ITC of tax paid under RCM at higher rates?
Answer: a composition dealer shall not claim credit of tax paid under RCM.
Also composition dealer shall pay tax under Reverse Charge Mechanism at normal rate of tax applicable to such supply and not at the rate applicable for his category.
Mr. Y
Service Receiver opting composition scheme
Mr. X
Service provider
When turnover of both recipient and the supplier are below threshold limit to obtain registration, what will happen in case recipient receives some goods or services which are liable to be taxed under Reverse Charge Mechanism? ?
Mr. X
Service provider
Mr. Y
Service receiver
Answer: As per section 24, person liable to pay tax under RCM compulsorily want to take registration under act. Thus Mr. y will have to take registration & pay tax under RCM. ( applicable for only section 9(3).
CA Nikhil Malaiya

41. Input Tax Credit

42. In eligible Input tax credit
Input Tax Allowed
Particulars
ITC allowed
Input Material
Full ITC Allowed
Input Service
Capital Goods
Tax Paid on RCM
In eligible Input tax credit
CA Mayur Zanwar
CA Nikhil Malaiya

43. Goods Used for: Goods Used for: In case of Bank
Analysis [Section 17 sub section (1, 2, &3)]
Proportionate Credit Example
Goods Used for:
Goods Used for:
In case of Bank
For Business
Purpose: 60%
For Non-Business
Purpose: 40%
For Taxable supplies
plus zero-rated
supplies: 60%
For Non-taxable supplies
plus exempted
supplies: 40%
Avail ITC as per Proportionate Credit concept
Avail only
50% of ITC Or
ITC Allowed: 60%
ITC Disallowed: 40%
ITC Allowed: to the extent use for Business
ITC Disallowed:
50%
ITC Allowed: 60%
ITC Disallowed:
40%
CA Nikhil Malaiya
CA Mayur Zanwar

44. Other Ineligible credit
Motor vehicles with few exceptions
Food & Beverages, Outdoor catering
Health services, Health & fitness centre to employees
Membership of a club to employee
Life insurance, health insurance to employee
Rent-a-cab to employees
Travel benefits extended to employees on vacation used primarily for personal use or consumption of any employee
Goods / services which are acquired / used in the construction of immovable property (other than Plant & Machinery)
works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further
supply of works contract service;
Goods and / or services on which tax has been paid under compounding levy scheme

45. Invoice

46. Whether Housing Society has to prepare invoice?
Yes, Housing Society is require to issue Tax Invoice, a tax invoice containing the following particulars:-
(a) name, address and GSTIN of the Society;
(b) HSN code of goods or Accounting Code of services;
(c) date of its issue and Consecutive Serial No.
(d) name, address and GSTIN or UIN, if registered, of the recipient;
(e) description of goods or services;
(f) quantity in case of goods and unit or Unique Quantity Code thereof;
(g) total value of supply of goods or services or both;
(h) taxable value of supply of goods or services or both taking into account discount or abatement, if any;
(i) rate of tax
(j) amount of tax charged in respect of taxable goods or services
(k) place of supply along with the name of State
(l) address of delivery where the same is different from the place of supply;
(m) whether the tax is payable on reverse charge basis; and
(n) signature or digital signature of authorized representative of society

47. Invoice Continue.. Whether it is mandatory to issue invoice?
As per section 31(2) It is mandatory to issue invoice by A registered person supplying taxable services before or after the provision of service but within a prescribed period of time.
What is Time Limit for Issue of Invoice?
As per rule 2, The invoice in case of taxable supply of services, shall be issued within a period of thirty days from the date of supply of service
How many Invoice is required to be generated?
(a) the original copy being marked as ORIGINAL FOR RECIPIENT; and
(b) the duplicate copy being marked as DUPLICATE FOR SUPPLIER.

48. Invoice Continue..
Whether invoice is require for exempted supply also?
As per section 31(3)(c ) in case of exempted supply Bill of Supply is to be issue.
Whether I can issue quarterly invoice on advance basis?
Yes, it is allowed, but in this case tax is also be on advance basis there might be cash crunch to society.
It is advisable to go for monthly billing.
What document is required to be issue in case of advance received?
a registered person shall, on receipt of advance payment issue a receipt voucher evidencing receipt of such payment.

49. Invoice Continue.. What document is require in case of payment in RCM?
a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.
Whether invoice is also require in case of RCM?
a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;
Whether there is exemption from issuance from invoice?
Yes, in case of supply below Rs.200 or purchase in case of RCM below Rs. 200 it is not mandatory to issue invoice,

50. Return Process Summary
Furnish detail of outward supplies on 10th
(Form GSTR 1)
Auto Populated detail which recipient has to accept in GSTR 2A
Furnish detail of inward supplies not filed by supplier on 15th in GSTR 2
Modify detail of Outward supplies as submitted by recipient by 20th In GSTR 1A
File Auto Generated Monthly return by 20th in GSTR 3

51. Relaxation in return filing procedure for 1st Two month
GST Council in its meeting held in 18th June 2017 decided that for 1St Two month i.e. July and September tax will be based on simple return in Form GSTR- 3B contain summary of outward and inward supplies
Form GSTR-3B is to be filed by 20th of succeeding month
Invoice wise detail for the month of July and august to be filed in regular return GSTR -1 as per timeline given below:
Month
Form GSTR-3B
Form GSTR-1
From GSTR-2
July
20th August
1st to 5th September
6th to 10th September
August
20th September
16yh to 20th September
21st to 25th september
CA Nikhil Malaiya
CA Mayur Zanwar

52. FAQ on Return Filing
Whether invoice detail of each member is to be mention in return?
No, as per rule 1 of Return Rule, In case of B2C supply consolidated details of all intra-State supplies made to unregistered persons for each rate of tax is to be provided in FORM GSTR-1.
What about detail of members who are register in GST?
As per rule 1 of Return Rule, In case of B2B supply invoice wise details of all inter-State and intra-State supplies made to registered persons is to be provided in GSTR-1.

53. Fails to File Annual Return
Penalty for Non Filing of Return
Fails to file on or before due date Detail of outwards Supplies, Inward Supplies or Monthly Return
Liable to pay late fees of Rs 100 per day during which such default continue
Maximum penalty is Rs.5000
Fails to File Annual Return
Liable to pay late fees of Rs. 100 per day during which such default continue
Maximum penalty is 0.25% of turnover in a state

54. Impact of consistently non filing of Return
The proper officer may cancel the registration if-
a person paying tax under composition scheme
If returns are not furnished for three consecutive tax periods (ie. For 3 Quarter
Other person (Who has not opt for composition scheme)
If return has not filed for continuous period of 6 month

55. What are the main Document Required for Registration of Society in GST?
Society is liable to register if aggregate turnover exceeds Rs Lakh in a Financial Year. Following Important Documents are required for Registration:
PAN Card of Society
Bank Statement of Society
Society Registration Certificate
Authorization Letter
Authorization person Address proof
Authorized person Photograph
Digital Signature Certificate of Authorized Person

56. E-mail: canikhilmalaiya@gmail.com
Cell: