GST on Co-operative Housing Societies
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Jashwant B Mehta writes, "[we] are disturbed at the arbitrary application of GST on Cooperative Housing Societies making living further costlier"
He has started a petition asking the Finance Minister to take immediate measures to amend GST Rules to stop undue hardship to residents. Sign his petition.
We the undersigned from all walks of life are disturbed for applying GST on Cooperative Housing Societies from 1st July, 2017. Buying a house may or may not become cheaper because of GST but living in a gated society is surely going to burn a big hole in our pockets in the coming months.
For any registered housing society or a residential complex, maintenance dues paid by its members of an amount upto Rs 5000 per month, service tax is exempted. However, housing societies will need to charge 18% GST to its members if maintenance recovery is more than Rs.5000/- p.m. per member & if total maintenance recovery by a society exceeds Rs. 20 lacs p.a. accordingly, only those societies who fall in this category (i.e. fulfilling both the conditions) will need to register under GST & charge from July onwards.
Even if a housing society's monthly maintenance charge is less than Rs 5,000 per flat, if its membership base is large and the annual collection is in excess of Rs 20 lakh, it would be liable to pay GST. In other words, in a housing society where monthly maintenance charges are in excess of Rs 5,000 then we will be required to shell out GST at 18%.
Housing societies or for that matter commercial premises societies are not involved in any trade or manufacturing business and they are per-se out of ambit of taxation, then how will they claim draw back on taxes paid. Since, housing societies or any other entities based on concept of mutuality are not business entities; it is unfair on the part of the government to slap GST on them now.
This is a major issue and requires an immediate and serious rethinking by the government to exclude housing societies out of GST rules by suitably amending them.
Jashwant B. Mehta
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