Question
Group of persons has purchased land and they have made the co. op. hsg society. now they are constructing flats for the members. query:- will the co. op. hsg society liable to take GST registration and liable to pay GST on advances received (against flat ) from its members. as of now this activity is exempt under income tax.
Answer
Facts of the Case:
Cooperative Housing Society is constructing flats for the members against
consideration, whether it is liable to take registration in GST.
Law Applicable:
SECTION 22 OF CGST ACT
(1) Every supplier shall be liable to be registered under this Act in the State
or Union territory, other than special category States, from where he makes a
taxable supply of goods or services or both, if his aggregate turnover in a
financial year exceeds twenty lakh rupees:
Provided that where such person makes taxable supplies of goods or services or
both from any of the special category States, he shall be liable to be
registered if his aggregate turnover in a financial year exceeds ten lakh
rupees.
SECTION 7 OF CGST ACT
(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;
SECTION 2 OF CGST ACT
(84) 'person' includes'
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(i) a co-operative society registered under any law relating to co-operative
societies;
(17) 'business' includes''
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(e) 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;
Notification No. 12/2017- Central Tax (Rate)
| 77 | Heading 9995 | 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 seven thousand five hundred 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. |
Nil | Nil |
Interpretation:
As per section 7 supply includes 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.
Cooperative society is included in the definition of a Person as per section
2(84) and is also receiving advances from members against flats in the form of
consideration.
So far as 'in the course or furtherance of business' is concerned, as per
definition of Business it includes 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.
Only the services provided by Cooperative society specified in Notification No.
12/2017 Central Tax are exempt. In the instant case the services provided by
Cooperative society are taxable under GST.
Conclusion:
Cooperative Housing society is providing taxable services in the course or
furtherance of business and is also recieving consideration. Therefore
Cooperative Housing society is liable to take registration if his aggregate
turnover in a financial year exceeds twenty lakh rupees. (Reply
dt.08/06/2019)