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TMI Blog2020 (9) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... t., engaged in the development and sale of Sites for its members. Applicant submitted that the process of formation of Sites involves identification of land, which may be an Agricultural land and this agricultural land has to be converted into non-agricultural land from the prescribed authority. Further society has to secure plan approval from the appropriate Planning authority and execute the works like marking of the sites, formation of the roads, preparing and leveling of the roads, asphalting the roads, formation of drainage, securing water and electric connection to the layout as a whole and connecting the same to the individual residential sites. Further, society has to develop Parks and other Civic Amenities in terms of the approved plan to make the sites developed, habitable one, and to ensure completion of the execution of all the other works in terms of the approved Plan. 3. The applicant submitted that after complete allotment of sites to its members in a layout, society has to handover the layout to the Local Municipal Administration (LMA) for maintenance and LMA taken over the layout for maintenance in a period between 5 years to 25 years depending upon the time taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ength of time say 10 years, should the GST be paid even for the amount pertaining to the un-expired period? 3. The Society is collecting Water charges from the residents for recovery of charges for water. The entire cost of the water is recovered from the members on monthly basis, does it attract GST? 4. Does the society have to pay GST for collecting lump-sum amount as endowment fund, the proceeds of which would be utilized for maintenance charges in terms of the maintenance as indicated in Appendix A above, of the layout with an express condition that the amount would be returned to the Site owners upon the taking over of the layout by the local body as the Society would be utilizing only accretions to the endowment fund from year to year. 5. In the event that any or all of the items from (1) to (4) is rendered taxable whether the same is exempt under Notification No. 12/2017 entry no 77 respect of the value of the maintenance amount collected from the members of the society to the extent of Rs. 7,500/- (Rupees Seven thousand five hundred) per month? PERSONAL HEARING 6. Sri Rajeev H.V. President of the M/s. Gnanaganga Gruha Nirmana Sahakara Sanga Niyamitha has appeare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red under the Karnataka Co-operative Societies Act. First, we have to decide whether the applicant is a housing society or not. Housing Society is not defined under the GST Act. As per section 2(16) of the Maharashtra Co-operative Society Act, 1960 "housing society" means a society, the object of which is to provide its member 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 common amenities and services. The applicant, being the House Building Co-operative Society, is engaged in the development and sale of sites to its members for housing, is covered under the term "housing society" for the purposes of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. 11. Further the applicant is carrying out the maintenance of layout like cleaning of vegetation in the sites, upkeep and maintain the roads and parks, ensuring un-interrupted supply of power and water to its residents by up-keeping the electrical and water installations with regular and proper maintenance, and also is providing proper civil amenities to its residents, till they handover the entire layout to the Local Munici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse or furtherance of business In the instant case, the applicant is involved in the providing layout maintenance service to its members by supplying goods or services and hence the first condition is satisfied. The applicant has rightly admitted that they are receiving the amount from its members as consideration towards the maintenance of the layout and hence the second condition is also satisfied. Further, as explained above, the facilities or benefits provided by the applicant to its member for consideration is a business as per section 2(17) of the CGST Act 2017 and hence the third condition is also satisfied. Hence the activity of maintenance of layout by the applicant amounts to supply in terms of Section 7 (1)(a) of the CGST Act 2017. 14. Further, as applicant has rightly admitted that they are collecting maintenance charges from its member, either annually or once in 10 years and said amount is utilized for the maintenance of the layout. The liability to pay tax on services shall arise at the time of supply as per the provisions of sub section (1) of section 13 of the CGST Act, 2017. Further, as per sub section (2) of section 13 of the CGST Act, 2017 the time of supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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)........ (b) For the provision of carrying out any activity which exempt from the levy of Goods and services Tax or (c) Up to an amount of seven thousand five hundred 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 From the above it is clear that the services provided by the 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 up to an amount of seven thousand five hundred 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 is exempted from the levy of GST. Since the applicant being the housing society, this exemption is also applicable to the applicant. However, from the above paras it was observed that applicant is not collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question it was submitted by the applicant that they are collecting lump-sum amount from its member who are selling their sites as fund and the proceeds of which are utilized for maintenance of the layout with an express condition that the amount would be returned to the site owners upon the taking over of the layout by the local body as the Society would be utilizing only accretions to the endowment fund from year to year. In order to claim exemption under entry 77(c) of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended by the Notification No.2/2018-dated 25-01-2018, applicant should fulfil the six conditions namely. 1. Service should be by the RWA/Housing society 2. Applicant/ Housing society should provide the services to its own members 3. Service provided by the applicant [housing society to its members should be against reimbursement of charges or share of contribution. 4. The reimbursement of charges or share of contribution should be up to Rs. 7500 per month per member. 5. Reimbursement of charges or share of contribution should be for sourcing of goods or services from a "third person" and 6. Such sourcing of goods or services should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, Section, Heading. Group or Service Code (Tariff) Description of services Rate (per cent) Condition 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)........ (b) For the provision of carrying out any activity which exempt from the levy of Goods and services Tax or (c) Up to an amount of seven thousand five hundred 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 Hence applicability of exemption under entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended by the Notification No.2/2018- dated 25-01-2018 is discussed in detail in above paras and this entry applicable to the applicant only when the they have provided services to its own members by way of reimbursement of charges or share of contribution up to an amount of seven thousand five hundred per month per member for sourcing of goods or services from a third person for the common use of its members. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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