GST or Goods and Services Tax is a tax that is levied on the supply of goods and services. It has been implemented in India since 1st July 2017. GST is a comprehensive and multi-stage tax that is levied on every value addition, from raw material to final consumption. It has replaced many indirect taxes in India, such as excise duty, VAT, service tax, etc. GST has brought about a significant change in the way businesses function in India.
GST on Housing Societies has been a topic of discussion for a while now. It is important to understand how GST impacts housing societies in India. GST is applicable on the supply of goods and services, which means that housing societies are also liable to pay GST on the services they provide to their members.
However, there has been some confusion regarding the applicability of GST on housing societies. The Central Board of Indirect Taxes and Customs (CBIC) has issued a circular clarifying the applicability of GST on housing societies. According to the circular, housing societies with an annual turnover of up to Rs. 20 lakhs are exempt from GST registration and the payment of GST. Housing societies with an annual turnover of more than Rs. 20 lakhs are required to register for GST and pay GST on the services they provide.
It is important to note that GST is applicable only on the services provided by the housing society and not on the maintenance charges collected from the members. Maintenance charges are not considered as a supply of goods or services and hence are not liable to GST. However, if the housing society provides any additional services such as renting out a community hall or a parking space, then GST will be applicable on the same.
Let's take a look at the various services provided by housing societies and their GST applicability:
Security services provided by the housing society to its members are exempt from GST. However, if the society hires a security agency to provide security services, then the society will have to pay GST on the amount paid to the security agency.
Housekeeping and cleaning services provided by the housing society to its members are exempt from GST. However, if the society hires a housekeeping agency to provide these services, then the society will have to pay GST on the amount paid to the housekeeping agency.
Clubhouse facilities such as gym, swimming pool, etc., are exempt from GST if they are provided by the housing society to its members. However, if the society rents out the clubhouse facilities to non-members, then GST will be applicable on the same.
Parking facilities provided by the housing society to its members are exempt from GST. However, if the society rents out the parking space to non-members, then GST will be applicable on the same.
Repair and maintenance services provided by the housing society to its members are exempt from GST. However, if the society hires a contractor to provide these services, then the society will have to pay GST on the amount paid to the contractor.
Electricity supply provided by the housing society to its members is exempt from GST. However, if the society generates electricity and sells it to non-members, then GST will be applicable on the same.
In conclusion, it is important for housing societies to understand the applicability of GST on the services they provide. Housing societies with an annual turnover of up to Rs. 20 lakhs are exempt from GST registration and payment of GST. However, housing societies with an annual turnover of more than Rs. 20 lakhs are required to register for GST and pay GST on the services they provide. It is important to note that GST is applicable only on the services provided by the housing society and not on the maintenance charges collected from the members.
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