Levy of ST / GST on 'housing complex' - contd.

 

B/F 
http://vswaminathan-swamilook.blogspot.in/2017/10/sc-in-re-hume-pipe-study.html.


https://timesofindia.indiatimes.com/city/bengaluru/rera-gst-likely-to-make-co-operative-society-sites-costlier/articleshow/62246229.cms?utm_source=plus.google.com&utm_medium=social&utm_campaign=TOIDesktop

Q

Also, ALL CHSs have been brought under GST and they need to register under the new taxation regime as their turnover collections are likely to exceed the limit of Rs 20 lakh. A SENIOR CO-OPERATIVE OFFICIAL said any transfer fee paid to the society by the new owner ON EXCHANGE OF OWNERSHIP OF FLAT will be taxable under GST at 18%," the official added.

Once a society is registered under GST, it has to meet various filing obligations. It also has to comply with the provisions of the reverse charge mechanism, under which if it makes payments to unregistered service providers such as cleaners, electricians and plumbers, it will have to bear the GST of 18% on such payments. It will also have to file relevant forms on the GSTN portal.

UQ

"CHS"-?!

Cross Refer >https://timesofindia.indiatimes.com/city/mumbai/apex-court-upholds-registration-of-andheri-co-operative-housing-society/articleshow/58664788.cms

Critique (Sample): https://ctconline.org/pdf/chamber-journal/CJ_April_2013/CJ_April_2013_14.pdf

Q

However,THERE WILL BE NO IMPOSITION OF GST ON MAINTENANCE CHARGES COLLECTED FROM FLAT OWNERS (MEMBERS OF THE CHS) UNLESS   the annual collection of the society is Rs 20 lakh or more or the monthly maintenance charge is more than Rs 5,000 per member.

UQ

The logic or rationale behind is apparently scarce, and highly wanting. In that, how and why a levy of GST will be justified or stand to any sane or sound reason based on the quantum of the collection , in the aggregate, or per member?

The requirement is blatantly wrong, in principle. And the thresh hold for levy makes no sense;and liable to be forcefully and legitimately,challenged, on, among others,the ground that the crucial factor, being the size (the number of the members)- on which the 'annual collection' will depend,   of the CHS has been over sighted, impudently so.

By any thinking, in reckoning the quantum of "annual collection",the  'maintenance charges',admittedly otherwise qualifying for exemption by applying the "principle of mutuality", ought to be excluded. To make it clear, the threshold limit(s)should be exclusive of the "MAINTENANCE CHARGES" ; which expression, should be clearly defined,so as to avoid any ambiguity likely to lend scope for uncertainty and resultant disputes and litigation.

For the legal arguments (constitutional issues) open to be urged, refer the case law,- for instance,cited, in another related context,in the 'swamilook' Blog @ http://vswaminathan-swamilook.blogspot.in/2017/10/sc-in-re-hume-pipe-study.html.

Master Note:

In any view of the matter, in terms of the view of the competent authority as reported, that has relevance and application only to a housing complex, of 'FLATS' ; and constituted and registered as 'CHS'. 

In other words, those requirements are, it could be validly urged, of no relevance or application to, hence do not call for compliance by, any other  housing society; that is, such as, of 'APARTMENTS', and not registered as 'CHS' - 'Owners' Association',  'RWA', or any other.