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TMI Blog2020 (7) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... CLUB OF POONA KOTHRUD [ 2019 (11) TMI 420 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA] where it was held that the membership fee collected by them will not subject to the GST and only the registration fee charged from the members for participation in the training programs/workshops will be subjected to GST - In the subject case, first of all there is no collection of me membership fees. Further, the applicant has not mentioned that they are undertaking any administrative expenses. Both, collection of membership fees and utilization of the same for administrative purposes are facts of the matter in the Lions Club case but not in the subject matter - the decision of the Authority in the case of M/s Lions Club, Kothrud is not applicable in the instant case. If the activities of the applicant are treated as supply under CGST Act, 2017 then whether the applicant has correctly discharged the GST as per the illustrative copy of the invoice generated by the Applicant? - HELD THAT:- The question which has been raised by the applicant is not pertaining to any of the matters mentioned in Section 97 (2) of the GST Act. In other words, Section 97(2), which encompasses the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Rules made thereunder, of the right, title and interest, in the land with building/buildings thereon b. To manage, maintain and administer the property of the society; c. To raise funds for achieving the objects of the society, d. To undertake and provide for, on its own account or jointly with a co-operative Institution, social, cultural or recreation activities, e. To do all things, necessary or expedient for the attainment of the objects of the society, specified in the bye-laws. 2.2 For the purpose of achieving its objects, Applicant raises funds by collecting contributions, (also called as charges in the bye laws of Applicant Society), from members of the society. 2.3 The said charges, collected on monthly or quarterly basis, include property taxes, common electricity charges, water charges, contribution to repairs maintenance funds, expenses on repairs and maintenance of the lifts of the society, including charges to running the lifts, contribution to sinking fund, service charges, car parking charges, interest on the defaulted charges, repayment of the installment of the loan and interest, non-occupancy charges, insurance c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence not liable for GST. Supply is an inclusive definition encompassing all kinds of supply, however only those transactions which are for consideration and in the furtherance or course of business will qualify as supply. The society charges levied on the members as per the Bye Laws is merely a contribution towards the collective the maintenance and upkeep of the Society and cannot be considered as consideration as defined in Section 2(31) of the CGST Act, 2017. The Contributors do not derive any profit from the said contributions. As settled by the various Supreme Court and High Court decisions, the Members of the Society and the Society are not distinct persons. They are one and the same. Thus, there is not flow of any consideration between two distinct persons. It is merely a contribution by each Member to the Society. Thus, for this reason also, the Society Charges levied on the Members cannot be termed as consideration . In till definition of business as defined in Section 2(17) of the CGST Act, 2017. Clause (e) specifically provides that business shall include provision by a club, association, society, or any such body (for a subscription or any other consideration) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, if any, rendered by the Co Operative Housing Society to its members against some consideration, which may be in the form of the monthly or quarterly charges. Therefore, the contention made by the Applicant with regard to the principle of mutuality to establish their claim that the Applicant Society and its member a e not distinct entity is not tenable in so far as taxability in the GST regime is concerned. 3.2 GST Law has given very wide connotation for services, which will cover any activity other than those involving goods, money and securities. Therefore, the activity of Applicant in as much as they are obtaining conveyance from the promoter (Builder), managing, maintaining and administering the property of the society, raising fund for achieving the objects of the society, undertaking and providing any social, cultural or recreation activities either by their own account or jointly with any co-operative institution etc., can clearly be considered as service being provided to its members. 3.3 From the definition of the term consideration as per Section 2(31) of the CGST Act, 2017, it can be construed that membership fees collected by the Applicant from its members is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07.01.2020, Sh. C B Thakar, Advocate appeared and made oral and written submissions. Jurisdictional Officer Sh. Raju Khobragade, Supdt., Division-VIII, Range-I, Commissionerate Mumbai South CGST, Mumbai also appeared and made written submissions. 05. OBSERVATIONS 5.1 We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional officer. 5.2 Applicant is a co-operative housing society, formed under the Maharashtra State Co-operative Societies Act, 1960 and does not carry out activities other than those mentioned in the bye laws of the society. 5.3 According to Section 2(16) of the Maharashtra Cooperative Society Act, 1960, housing society means a society, the object of which is to provide its members with open plots for housing, dwelling houses or flats; or if open plots, the dwelling houses or flats are already acquired, to provide its members co mon amenities and services. It can be said that a co-operative housing society is body of persons, who stay in a residential/housing society. As a collective body, the society would be supplying certain services to its members, like colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find from the definition of supply that, to be considered so, such supply should be made by a person, for a consideration and should be made in the course or furtherance of business . Thus we have to find whether; the Applicant can be considered as a person ; whether the amounts collected from their members can be treated as consideration and finally whether such supply is made in the course or furtherance of business. 5.6 The word person mentioned in Section 7 (1) (a) is definer: in Section 2(84) (i) of the CGST Act, 2017 and amongst others, specifically includes a co-operative society registered under any law relating to ho-operative societies . Thus a registered co-operative society is a person within the meaning of the term in the CGST Act. We agree with the jurisdictional officer that as per the definition of the term person , in terms of Section 2(84) of the CGST Act, 2017, in the instant case, there are two distinct persons, one the Applicant Society and another, the member thereof. Thus we find that in the subject case there is a supply made by a person i.e. the applicant. 5.7 The next question which arises is whether the activities (supply of services) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at both, the Applicant as well as its members are to be considered as separate person. The contention made by the Applicant with regard to the principle of mutuality to establish their claim that the Applicant Society and its member are not distinct entity is not tenable in so far as taxability in the GST regime is concerned. 5.13 We now reproduce the relevant portion of Circular No.109/28/2019-GST dated 22.07.2019, issued vide F. No. 332/04/2017-TRU by the Government below:- Sl.No. Issue Clarification 1. Are the maintenance charges paid by residents to the Resident Welfare Association (RWA) in a housing society exempt from GST and if yes, is there an upper limit on the amount of such charges for the exemption to be available? Supply of service by RWA (unincorporated body or a non- profit entity registered under any law) to its own members by way of reimbursement of charges or share of contribution up to an amount of ₹ 7500 per month per member for providing services and goods for the common use of its members in a housing society or a residential complex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CUTTA as well as in the case of Sports Club of Gujarat Ltd. Vs. Union of India (2010) 35 VST 75 (Guj HC) = 2009 (8) TMI 667 - GUJARAT HIGH COURT to emphasize that their activities are not liable to GST in view of the principle of mutuality. 5.15.1 In this regard, we find that both the Above two cases pertain to the period prior to 2012 and deeming provision was introduced with effect from 01.07.2012, to the effect that club and members are deemed to be separate persons. 5.15.2 We find that the judgements of the concerned High Courts in the case of Saturday Club Ltd. Vs. Assistant Commissioner, Service Tax Cell, Calcutta Ors = 2004 (6) TMI 11 - HIGH COURT CALCUTTA as well as in the case of Sports Club of Gujarat Ltd. Vs. Union of India (2010) 35 VST 75 (Guj HC) = 2009 (8) TMI 667 - GUJARAT HIGH COURT , has been distinguished by the Hon ble Authority for Advance Ruling, New Delhi, Central Excise, Customs and Services Tax in respect of application filed by M/s Emerald Leisures Ltd. (Ruling No. AAR/44/ST/10/2015 in Application No. AAR/44/ST/07/2014 dated 11.09.2015 = 2015 (10) TMI 297 - AUTHORITY FOR ADVANCE RULINGS wherein in para 15 of the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of carrying on service activities in a better manner. 5.16.2 In the subject case, first of all there is no collection of me membership fees. Further, the applicant has not mentioned that they are undertaking any administrative expenses. Both, collection of membership fees and utilization of the same for administrative purposes are facts of the matter in the Lions Club case but not in the subject matter. 5.16.3 We therefore feel that the decision of the Authority in the case of M/s Lions Club, Kothrud is not applicable in the instant case. Similarly the facts in the case of M/s. Rotary Club of Mumbai Western Elite are different from the facts of the subject matter. Hence the said decisions are not applicable in the subject case. 5.17 The second query raised by the applicant is If the activities of the applicant are treated as supply under CGST Act, 2017 then whether the applicant has correctly discharged the GST as per the illustrative copy of the invoice generated by the Applicant? 5.17.1 In this matter we feel it necessary first to decide whether the said question raised by the applicant is covered under Section 97(2) of the CGST Act, 2017, and thus maint ..... X X X X Extracts X X X X X X X X Extracts X X X X
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