Issue No: 21 Moneta July 2017
( 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.
As per Clause
( a) of above Section, supply includes all forms of supply of Goods or Services made or agreed to be made for a consideration by a person in the course or furtherance of business.
From the above following need to be answered to understand applicability of supply provisions
� |
Whether Co-operative |
Housing |
Society or |
Residential |
Welfare |
Associations |
are |
making |
any supply? |
|
|
� |
Whether such supply is Taxable? |
� |
Whether Co-operative |
Housing |
Society or |
Residential |
Welfare |
Associations |
are |
making |
any |
|
supply for Consideration? |
|
� |
Whether Co-operative |
Housing |
Society or |
Residential |
Welfare |
Associations |
are |
involved |
in |
any Business Activity? |
It is clear that a co-operative housing |
society |
providing |
some |
common |
services to its members and collects |
the expenditure incurred either for |
21 some specific purpose like municipal taxes, water charges, electricity charges etc. on the basis of area of flats or some other appropriate basis. Other expense like maintenance, repairs to society’ s building, maintaining common facilities like lift, DG Set, Gym, Garden, parking space etc. are also allocated and collected from the members. It is clear that the society is providing above services constitutes as supply.
Services of membership organizations are taxable supply and specific entry is made against Service Accounting Code( SAC) 999598 for Home owners associations
Now let us discuss about Consideration
What is Consideration?
Sec 2( 31) of CGST Act: ― consideration ‖ in relation to the supply of goods or services or both includes ––
( a) Any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government;
Therefore these services forms supply and monthly / periodic maintenance charges collected from members may be treated as Consideration.
The last test is whether the Housing Society is involved in any Business Activity?. Let us discuss what is business?