Introduction:
A Cooperative Housing Organisation (CHS) is a collection of people that work together to acquire and develop land for residential use. CHS provides low-cost housing to its members, who collectively control and run the organisation. Since the implementation of GST in India on July 1, 2017, there has been confusion concerning its applicability and GST on Co-operative Housing Society.
Cooperative Housing Societies and GST Applicability:
The GST Act does not specifically exempt CHS in any way. As a result, CHS is responsible for paying GST on the services they render. Numerous services provided by CHS are taxed under the GST, including security, housekeeping, and maintenance of common areas. The GST paid on the products and services used to provide these services can, however, be claimed by CHS as an input tax credit (ITC).
On the services they offer, CHS must charge GST at a rate of 18%. The CHS, however, is excluded from GST registration if its yearly revenue is less than Rs. 20 lakhs. Additionally, if its yearly turnover is under Rs. 1.5 crores, CHS may choose a composition scheme. CHS must pay 1% of its yearly revenue in GST under the composition plan, which is a lower rate.
Understand the GST’s Applicability to Cooperative Housing Societies:
In India, Cooperative Housing Societies (CHS) offer low-cost housing to millions of people. However, CHS also offers a variety of services, including housekeeping, security, and upkeep of common areas, all of which are subject to the Goods and Services Tax (GST) regime and are taxable.
CHS is not given any explicit exemption under the GST Act. As a result, CHS is responsible for paying GST on the services they render. CHS is subject to an 18% GST tax on the services they offer. CHS are free from GST registration, though, if their yearly revenue is less than Rs. 20 lakhs. Additionally, CHS has the option to use the composition plan if their annual revenue is under Rs. 1.5 crores. According to the composition plan, CHS is required to pay 1% of their annual revenue in GST, which is a lower rate.
The GST regime imposes several compliance requirements on CHS. In the event that their yearly turnover exceeds Rs. 20 lakhs, they must register for GST. Even if CHS is not required to pay GST, they must register for it. Depending on their annual revenue,
CHS must file monthly or quarterly GST filings. GSTR-1, GSTR-3B, and GSTR-4 returns must be submitted by them. The CHS is required to keep accurate records of all invoices and other GST-related paperwork. For the services they render to its members, they must send tax invoices. The GST paid on the products and services used to provide taxable services can be reclaimed by CHS as an Input Tax Credit (ITC). However, they are required to keep accurate records of invoices and other ITC-related paperwork.
So, CHS must pay GST on the services they provide, and they are eligible to claim ITC for the GST they paid on the supplies and equipment they used to perform those services. CHS must register for GST if their yearly revenue exceeds Rs. 20 lakhs, among other GST-related compliance requirements. In order to pay a reduced rate of GST,
CHS may also choose the composition plan if their yearly revenue is less than Rs. 1.5 crores. In order to prevent any fines or interest charges, CHS must comprehend the GST’s applicability and compliance requirements. As a result, it is advised that CHS obtain expert counsel and make sure that the GST regulations are being followed.
Conclusion
The Goods and Services Tax (GST) has special ramifications for Cooperative Housing Societies. Cooperative housing societies are exempt from GST under the GST law for services provided to their members. This involves the collecting of contributions, maintenance fees, and any other fees relating to the society’s common areas and facilities. However.
If a cooperative housing society provides non-members with services, such as renting out the society’s premises for events or offering services to non-residents, GST may apply. To guarantee compliance with the GST requirements, cooperative housing societies must grasp the precise GST provisions that apply to their services.
