GST on Housing Soceity

Housing societies or Resident Welfare Associations (RWAs) are typically registered as non-profit entities and are generally exempt from GST (Goods and Services Tax) under the GST law. However, if the annual turnover of the society exceeds the threshold limit of Rs. 20 lakhs, then the society is required to register under GST and pay GST on the excess turnover at the applicable rates.

If the society collects any amount from its members as a contribution towards common expenses such as maintenance, repairs, security, etc., such collections are not considered as supply of goods or services and are therefore not liable to GST.

However, if the society provides any taxable service to its members such as renting of the common area for an event, or supply of goods such as electricity, water, etc., then such services are liable to GST at the applicable rates.

It is important to note that if the society is registered under GST, it will be required to comply with various GST provisions such as filing of GST returns, issuance of GST invoices, and payment of GST on a regular basis. Therefore, it is advisable for housing societies to seek professional advice on their GST obligations to ensure compliance with the law.

Objectives, Benefits ,Implementation of GST on Housing Society

Objectives:

The objective of implementing GST on housing societies is to bring them under the GST regime and ensure that the taxable supplies made by them are subject to GST. The implementation of GST on housing societies helps to bring transparency and accountability in the financial operations of the society and ensures that they comply with the provisions of the GST law.

Benefits:

The implementation of GST on housing societies provides the following benefits:

1. Clarity on GST applicability: It provides clarity on the applicability of GST on the services provided by housing societies, which was previously ambiguous and led to disputes.

2. Improved compliance: Housing societies will be required to comply with the provisions of the GST law, which will help to improve their financial management and reduce the chances of tax evasion.

3. Increased transparency: The implementation of GST on housing societies will lead to increased transparency in the financial operations of the society.

Implementation:

The implementation of GST on housing societies is a straightforward process. The following steps need to be followed:

1. Determine the GST liability: The first step is to determine the GST liability of the society by identifying the taxable supplies made by the society.

2. Registration: If the turnover of the society exceeds the threshold limit of Rs. 20 lakhs, it will be required to register under GST and obtain a GSTIN.

3. Filing of GST returns: Housing societies will be required to file GST returns on a regular basis, such as monthly, quarterly, or annually, depending on the turnover of the society.

4. Payment of GST: The society will be required to pay the GST liability on the taxable supplies made by it at the applicable rates.

5. Compliance: The society will be required to comply with various GST provisions such as issuance of GST invoices, maintaining proper records, and other compliance requirements.

It is important to note that housing societies should seek professional advice on their GST obligations and comply with the provisions of the GST law to avoid any legal or financial implications.

Whether activities of Housing Societies would become more expensive under GST?

Whether the activities of Housing Societies would become more expensive under GST or not depends on the specific services provided by the society and their GST rate.

If the services provided by the housing society are exempted or have a lower GST rate, then the cost of these services may remain the same or may even decrease. However, if the services provided by the housing society are taxable at a higher GST rate, then the cost of these services may increase.

For instance, services like maintenance, repairs, security, etc. provided by the housing society are generally exempt from GST or are taxed at a lower rate. On the other hand, services like renting of the common area for an event, supply of goods such as electricity, water, etc. are taxable at the standard GST rate, which may lead to an increase in the cost of these services.

It is important to note that the implementation of GST on housing societies aims to bring transparency and accountability in the financial operations of the society and ensure compliance with the provisions of the GST law. While there may be some initial compliance costs, the long-term benefits of GST implementation may outweigh these costs.

Therefore, it is advisable for housing societies to seek professional advice on their GST obligations and the impact of GST on their services to make an informed decision.

FAQs

Q: What is a housing society?

A: A housing society is a group of people who come together to jointly own and manage residential property for the benefit of its members. The society is registered under the Cooperative Societies Act and is governed by a committee elected by its members.

Q: Is GST applicable to housing societies?

A: Yes, GST is applicable to housing societies for the taxable services provided by them. The GST rates for different services provided by the housing society are prescribed by the government.

Q: What are the taxable services provided by housing societies?

A: Some of the taxable services provided by housing societies include renting of the common area for an event, supply of goods such as electricity, water, etc., and any other services provided to the members for a consideration.

Q: What is the threshold limit for registration under GST for housing societies?

A: The threshold limit for registration under GST for housing societies is Rs. 20 lakhs. If the turnover of the society exceeds this limit, it will be required to register under GST and obtain a GSTIN.