2020 (3) TMI 1035 - HC - GST

Service rendered by the applicant, a registered housing society/resident welfare association to its members - exemption under SI.No.77(c) of Notification No.12/2017-C.T.(Rate) dated 28.06.2017 as amended for CGST and SI.No.77(c) of Notification No.II(2)/CTR/532(d-15)/2017 vide G.O.(Ms)No.73 dated 29.06.2017 as amended for SGST. The question is whether the petitioner is liable to pay GST if the amount collected exceeds ₹ 7,500/-, for the whole amount or only towards the exceeded amount. The term upto employed in the Notification is heavily relied on by the learned counsel for the petitioner to contend that only exceeded amount is liable for the tax and not the whole amount collected. The issue raised needs detailed consideration of this Court. Hence, the respondents are directed to file counter - Post the matter after four weeks.

Summary

Issues:
Interpretation of exemption under Notification No.12/2017-C.T.(Rate) dated 28.06.2017 for GST on services provided by a housing society/resident welfare association.

Analysis:
The petitioner, a housing society/resident welfare association, challenged an order by the Advance Ruling Authority stating that services provided to members are not exempt from GST if the amount exceeds &8377; 7,500 per month. The petitioner argued that the exemption applies only to the amount up to &8377; 7,500, and tax should be levied only on the exceeded amount. Citing a CBEC E-Flier, the petitioner contended that GST should only be applicable on the amount exceeding a certain threshold, in this case, &8377; 5,000.

The main contention revolves around the interpretation of Notification No.12/2017-C.T.(Rate) dated 28.06.2017, as amended, which provides an exemption from GST up to &8377; 7,500. The petitioner argues that the term "upto" in the notification implies that only the exceeded amount beyond &8377; 7,500 should be subject to GST, not the entire sum collected. This interpretation raises a significant legal question regarding the application of GST to the services provided by the housing society/resident welfare association.

The High Court directed the respondents to file a counter to address the raised issue thoroughly. The Court decided to postpone further proceedings for four weeks. In the interim, the petitioner was allowed to pay GST only on the amount exceeding &8377; 7,500, pending a detailed examination of the matter. This case highlights the importance of precise interpretation of tax laws and notifications to determine the tax liability of entities providing services to their members. The outcome of this case could have broader implications for similar entities subject to GST regulations.