Issue No: 21
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
Thus Supply of service by Housing
Society / RWA (unincorporated body
or a registered non-profit entity) to its
own
members
by
way
of
reimbursement of charges or share
of contribution up to Rs 5,000 per
month per member for providing
Services and goods for common use
of its members in a housing
society/residential
complex
are exempt from GST.
This exemption will not be
available for commercial units or
complexes.
Further, if the aggregate turnover of
such Housing Society / RWA is up to
Rs 20 lakh in a financial year, then
such supplies would be exempted
from GST even if charges per
member are more than Rs 5,000.
A Housing Society / RWA shall
be required to pay GST on monthly
subscription / contribution charged
from
its
members
if
such subscription is more than Rs
5,000 per member and the annual
turnover of RWA by way of supply
of services and goods is also Rs
20 lakh or more.
Moneta
July 2017
Input Tax Credit (ITC) Allowed :
If the Society becomes liable to pay
GST, it is allowed to take Input Tax
Credit under Sec 16 (1) of CGST Act
subject to conditions for taking input tax
credit. Housing Society is entitled to
ITC in respect of taxes paid by them on
capital goods (generators, water
pumps, lawn furniture etc.), goods
(taps, pipes, other sanitary/hardware
fillings etc.) and input services such as
repair and maintenance services – Lift
AMC, Housekeeping, Security, Fire
AMC, Repairs & Maintenance, Contract
staff, Accounting & Auditing Services
and other such services.
Whether Tax Burden Increase?
There are certain apprehensions that
tax burden to members of the Housing
Society will increase from earlier 15 %
(including Cesses) of Service Tax to
18% payable under GST. The tax
burden however will be lower under
the GST since they would now be
entitled to Input Tax Credit (ITC) in
respect of taxes paid by them on
capital goods like water pumps,
generators, lawn furniture etc and input
repair and maintenance services. The
ITC of VAT and Central Excise on
goods and capital goods was not there
in the pre-GST period and these were
part of the cost to the RWA.
Applicability of Reverse Charge
Mechanism
Tax liability under Reverse Charge as
defined under Sec 2(98) of CGST
Act also applicable. That means tax
shall be payable by the Housing
Society when supplies are received
which are notified Services as per Sec
9(3) of CGST Act like services of
Goods Transport Agency, Advocate
Services etc. and also supplies from
Un-registered Person under Sec 9(4) of
That means three cases arise from
above
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