MUMBAI: As many as 70,000 co-operative housing societies (CHS) within the state, together with 50,000 within the Mumbai Metropolitan Region (MMR), will have to check in beneath the Goods and Services Tax (GST) regime as their annual collections (turnover) are more likely to exceed the threshold of Rs 20 lakh. This number was showed through senior co-operative officials.
In many instances, switch charges, which are charged through the CHS and paid through incoming and outgoing members when a flat within the CHS is sold, contribute considerably against a society's annual assortment.
While the type bylaws beneath the Maharashtra Co-operative Societies Act have placed a restrict of Rs 25,000 on switch charges, in fact the fees run right into a lakh or extra in line with switch.
Thus, collections from switch charges might imply that even CHSs housing the middle categories might find themselves having a turnover of over the threshold of Rs 20 lakh and would want to check in beneath GST.
"In such instances, any transfer fee paid to the society by the new owner on exchange of ownership of flat will be taxable under GST at 18%," said Ramesh Prabhu, chairman of Maharashtra Societies Welfare Association which has a club of over 50,000 societies.
For instance, the Siddhivinayak housing society in Chembur has found itself in a situation the place it has had to check in beneath GST, said Roshan Matkari, a society member.
Once a society is registered beneath GST, it has to meet more than a few filing tasks. It additionally has to agree to the provisions of the opposite price mechanism. Under this mechanism, if it makes payments to unregistered service suppliers reminiscent of cleaners, electricians and plumbers, it will must endure the GST of 18% on such payments and now have to document relevant paperwork on the GSTN portal.
But what's vital for flat homeowners is that the standards for registration and for imposition of GST on repairs fees gathered from members are other. The executive has over and over again clarified that GST might be levied on repairs fees gathered from flat homeowners (members of the CHS) provided that the once a year collection of the society is Rs20 lakh or extra and the per thirty days repairs price is more than Rs5,000 in line with member (See graphic).
Maintenance fees are generally gathered through a CHS for more than a few functions like providing safety, lift repairs, repairs of common areas like a foyer or a garden and are generally a refund for bills incurred. As explained through TOI previous, taxes like property, water, or electricity fees gathered through the CHS from its members on behalf of native authorities or power entities might not be matter to GST.
According to a central authority round, co-operative housing societies beneath GST are entitled to input tax credit (ITC) in appreciate of taxes paid through them on capital goods (reminiscent of turbines, water pumps, lawn furnishings), goods (reminiscent of taps, pipes, other sanitary/hardware fillings) and towards input products and services reminiscent of restore and maintenance products and services.
Despite availability of input tax credit, several members find an building up of their bills, owing to the rate building up from 15% to 18%. Vidyesh Karmarkar from Jeevandayini cooperative housing society in Malad said his society had already began charging three% extra taxation than sooner than, thus taking the overall taxation on Rs5,300 per thirty days repairs to Rs954. "Earlier we paid Rs795 on the same amount. Thus the new taxation is a net increase of Rs159 on the bill," he identified.
Flat homeowners who've been asked to pay GST through their CHS must take a look at that the society has bought valid registration. "How can I pay GST on the bill which does not bear an authentic GST registration number?" asked Ashlesha Mujumdar, who resides in a flat in a CHS.
In many instances, switch charges, which are charged through the CHS and paid through incoming and outgoing members when a flat within the CHS is sold, contribute considerably against a society's annual assortment.
While the type bylaws beneath the Maharashtra Co-operative Societies Act have placed a restrict of Rs 25,000 on switch charges, in fact the fees run right into a lakh or extra in line with switch.
Thus, collections from switch charges might imply that even CHSs housing the middle categories might find themselves having a turnover of over the threshold of Rs 20 lakh and would want to check in beneath GST.
"In such instances, any transfer fee paid to the society by the new owner on exchange of ownership of flat will be taxable under GST at 18%," said Ramesh Prabhu, chairman of Maharashtra Societies Welfare Association which has a club of over 50,000 societies.
For instance, the Siddhivinayak housing society in Chembur has found itself in a situation the place it has had to check in beneath GST, said Roshan Matkari, a society member.
Once a society is registered beneath GST, it has to meet more than a few filing tasks. It additionally has to agree to the provisions of the opposite price mechanism. Under this mechanism, if it makes payments to unregistered service suppliers reminiscent of cleaners, electricians and plumbers, it will must endure the GST of 18% on such payments and now have to document relevant paperwork on the GSTN portal.
But what's vital for flat homeowners is that the standards for registration and for imposition of GST on repairs fees gathered from members are other. The executive has over and over again clarified that GST might be levied on repairs fees gathered from flat homeowners (members of the CHS) provided that the once a year collection of the society is Rs20 lakh or extra and the per thirty days repairs price is more than Rs5,000 in line with member (See graphic).
Maintenance fees are generally gathered through a CHS for more than a few functions like providing safety, lift repairs, repairs of common areas like a foyer or a garden and are generally a refund for bills incurred. As explained through TOI previous, taxes like property, water, or electricity fees gathered through the CHS from its members on behalf of native authorities or power entities might not be matter to GST.
According to a central authority round, co-operative housing societies beneath GST are entitled to input tax credit (ITC) in appreciate of taxes paid through them on capital goods (reminiscent of turbines, water pumps, lawn furnishings), goods (reminiscent of taps, pipes, other sanitary/hardware fillings) and towards input products and services reminiscent of restore and maintenance products and services.
Despite availability of input tax credit, several members find an building up of their bills, owing to the rate building up from 15% to 18%. Vidyesh Karmarkar from Jeevandayini cooperative housing society in Malad said his society had already began charging three% extra taxation than sooner than, thus taking the overall taxation on Rs5,300 per thirty days repairs to Rs954. "Earlier we paid Rs795 on the same amount. Thus the new taxation is a net increase of Rs159 on the bill," he identified.
Flat homeowners who've been asked to pay GST through their CHS must take a look at that the society has bought valid registration. "How can I pay GST on the bill which does not bear an authentic GST registration number?" asked Ashlesha Mujumdar, who resides in a flat in a CHS.
50,000 co-op housing societies in Mumbai and suburbs in GST net
![50,000 co-op housing societies in Mumbai and suburbs in GST net]()
Reviewed by Kailash
on
October 21, 2017
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