GST on RHS

1. CA. KRISHAN DEV SINDHU
B.Com(H), FCA
E: cakrishandev@gmail.com
M: +91-98785-40755
TAXATION OF CO-OPERATIVE
HOUSING SOCIETIES

2. INTRODUCTION
2
 A Co-Operative Society is a taxable entity under the
Income Tax Act, 1961. A Cooperative Society under the
Act is to be treated as an Association of Persons (AOP),
which is included in the definition of 'person' under the
Income Tax Act, 1961.
 Even though, for taxation purposes, the status of a
cooperative society is to be taken as an Association of
Persons, the Section 67A and Section 86 of the Act have
been excluded from application to the members of
society.

3. PRINCIPLE OF MUTUALITY
3
 The cardinal requirement in case of mutual association
is that ‘All the contributors to the common fund must
be entitled to participate in the surplus & all the
participators to the surplus must be contributors to
the common trade. In other words there should be
complete identity between the contributors and the
participators.’
Eg: If the cooperative earns interest from bank or
parking income from non-members or rental
income by letting roof for mobile towers, then all
these incomes are chargeable to tax.

4. STATUTORY REQUIRED
COMPLIANCE PROVISIONS
4
Required compliances:-
 PAN Card
 TAN Registration
 Registration under the various other Act as
Service Tax/VAT/GST (w.e.f . 1.7.17)
other Laws etc. (whichever is applicable)

5. STATUTORY COMPLIANCE REQUIRED FOR HOUSING SOCIETY
5
REQUIRED COMPLIANCE CONSEQUENSES
Section
44AA
Maintenance of
accounts
by certain
persons
carrying on
profession or
business
Income is
more than
Rs. 1.5 lac-
Rule 6F: cash
book, Journal,
ledger, Original
bills, Payment
vouchers & other
supporting
documents
Section
271A
Failure to keep,
maintain or retain
books of account,
documents, etc.
Penalty of
Rs. 25000
Section
44AB
Audit of
accounts
of certain
persons
carrying on
business or
profession
Gross receipts
more than
Rs. 1 Crore -
requires to get
Books of
accounts TAX
AUDITED.
Section
271B
Failure to get
accounts audited
Penalty of
Rs. 1.50 lac
Or
Rs. 0.50% of
Gross Receipts
(Which ever is
less)

6. STATUTORY COMPLIANCE FOR HOUSING SOCIETY –
TDS COMPLIANCE - (Chapter XVII- B of the ACT)
6
REQUIRED COMPLIANCE CONSEQUENSES
Section 203AA:
Furnishing of TDS return/
statement
Within the time period under
as specified under the Act.
Section
234E
Fee for
delayed in
(TDS return)
furnishing
statements
Late filling
Fees Rs. 200
per day of
default.
Section
234H
Fee for fails
to filled TDS
return in
furnishing
statements
Penalty of
Rs. 10,000
can be gone
upto Rs. 1 lac.

7. TDS COMPLIANCES
7
Compliances of other TDS provisions are all applicable
for cooperatives housing society:-
 Time limit for deposit of TDS, (7th of the following
month )
 Electronic filing TDS returns,
 Issuance of NSDL generated Form 16A

8. INCOME TAX RETURNS
& TAX AUDIT REPORT
8
 Income Tax Returns and Tax Audit Report to be filed by
the 30th of September
 Without filing of returns within the stipulated due date,
business losses or loss under the head of capital gains of
a society cannot be carried forward.
 Losses under the head of Income from House Property
and un-absorbed depreciation cannot be carried
forward at all if returns have not been filed.
 Provisions related to E-Filing and Digital Signature are
also applicable in the case of societies.

9. TAX SLAB FOR AOP / BOI
9
 Tax liability of AOP/BOI depends on whether or not share of members
of AOP/BOI are known
 Where share of members are not known
In such a case income of the AOP/BOI shall be taxable at maximum
marginal rate (i.e., 30% plus surcharge, EC and SHEC as applicable).
 For the purposes of this section, the individual shares of the members
of an AOP or BOI in the income of AOP/BOI shall be deemed to be
indeterminate or unknown if such shares are indeterminate or
unknown on the date of formation of such AOP or BOI or at any time
thereafter.
Note: Surcharge: The amount of income-tax shall be further increased
by a surcharge at the rate of 15% of such tax, where total income
exceeds one crore rupees. However, the surcharge shall be subject to
marginal relief (the total amount payable as income-tax and surcharge
shall not exceed total amount payable as income-tax on total income of
one crore rupees by more than the amount of income that exceeds one
crore rupees).

10. PAYMENT OF ADVANCE TAX
10
 By 15th September- 30%,
 By 15th December- 60%
 By 15th March - the whole amount of such
advance tax as reduced by
the amount paid in
earlier instalment(s).

11. STATUTORY COMPLIANCE REQUIRED FOR HOUSING SOCIETY
11
REQUIRED COMPLIANCE CONSEQUENSES
Section 139
Return of income- MANDATORY
Within the time period under as
specified under due time period
under Section 139(1)
Otherwise,
SECTION 234F - PENALTY:
RS. 5,000 to Rs. 10,000.
Section
234A
Interest for
defaults in
furnishing
return of
income
Interest
@1% per month
on tax payable,
calculated from
due date of
filling of return.
Section
234B
Interest for
defaults in
payment of
advance tax
Interest
@1% per month
on advance tax
payable
( 90 % of
accessed tax).
Section
234C
Interest for
deferment of
advance tax
Interest @1%
per month on
advance tax
deferment
payable.

12. 12
GOODS AND SERVICE TAX
PAY GST
TAXABLE
SUPPLY
GST INPUT
TAX CREDIT
EXEMPTED
SUPPLY
NO INPUT TAX
CREDIT
NO GST
SUBJECT TO
CONDITIONS

13. GST IN THE CASE OF CO-OPERATIVE
HOUSING SOCIETIES
13
As per the definition, any unincorporated
association or body of persons and a member
thereof shall be treated as distinct persons.
A co – operative housing society and its
members cannot claim benefit of mutuality
in the transactions between them. Therefore,
collections from members shall become
liable to tax if they are in the nature of any
activity carried out by the society for its
members as provided in the definition.

14. GOODS AND SERVICE TAX
14
Definition of GST
Constitution (101st Amendment) Act, 2017
“Goods and services tax”
means any tax on supply of
goods, or services or both
except taxes on the supply of
the alcoholic liquor for human
consumption
Article
366(12A)

15. 15
Sl
No
Definition Section Definition
1. Goods 2(52) Every kind of movable property other
than money and securities but
includes actionable claim, growing
crops, grass and things attached to or
forming part of land which are agreed
to be served before supply or under a
contract of supply.
2. Service 2 (102) Anything other than goods, money
and securities
RELEVANT DEFINITION FOR CO-OPERATIVE HOUSING
SOCIETY UNDER GST

16. 16
Sl
No
Definition Section Definition
3. Business 2(17) (a) any trade, commerce, manufacture, profession, vocation,
adventure, wager or any other similar activity, whether or not it is
for a pecuniary benefit;
(b) any activity or transaction in connection with or incidental or
ancillary to sub-clause (a);
(c) any activity or transaction in the nature of sub-clause (a),
whether or not there is volume, frequency, continuity or regularity
of such transaction;
(d) supply or acquisition of goods including capital goods and
services in connection with commencement or closure of business;
(e) provision by a club, association, society, or any
such body (for a subscription or any other
consideration) of the facilities or benefits to its
members;
(f) admission, for a consideration, of persons to any premises;
(g) services supplied by a person as the holder of an office which
has been accepted by him in the course or furtherance of his trade,
profession or vocation;
(h) services provided by a race club by way of totalisator or a
licence to book maker in such club ; and
(i) any activity or transaction undertaken by the Central
Government, a State Government or any local authority in which
they are engaged as public authorities

17. 17
Sl
No
Definition Section Definition
4. Person 2(84) (a) an individual;
(b) a Hindu Undivided Family;
(c) a company;
(d) a firm;
(e) a Limited Liability Partnership;
(f) an association of persons or a body of individuals,
whether incorporated or not, in India or outside India;
(g) any corporation established by or under any Central Act,
State Act or Provincial Act or a Government company as
defined in clause (45) of section 2 of the Companies Act, 2013;
(h) any body corporate incorporated by or under the laws of a
country outside India;
(i) a co-operative society registered under any law relating
to co-operative societies;
(j) a local authority;
(k) Central Government or a State Government;
(l) society as defined under the Societies Registration Act,
1860;
(m) trust; and
(n) every artificial juridical person, not falling within any of the
above.

18. 18
Sl
No
Definition Sectio
n
Definition
5. Aggregate
Turnover
2(6) the aggregate value of all taxable supplies
(excluding the value of inward supplies on which
tax is payable by a person on reverse charge
basis), exempt supplies, exports of goods or
services or both and inter-State supplies of
persons having the same Permanent Account
Number, to be computed on all India basis but
excludes central tax, State tax, Union territory tax,
integrated tax and cess.

19. 19
Section 22 : “Persons Liable for Registration”
(CGST Act, 2017)
Provisions under Section 22 of the Central Goods and Services Tax (CGST)
Act, 2017 relating to “Persons Liable for Registration”, are as under:
(1) Every supplier shall be liable to be registered under
this Act in the State or Union territory, other than special
category States, from where he makes a taxable supply
of goods or services or both, if his aggregate turnover
in a financial year exceeds twenty lakh rupees (₹20
Lac):
Provided that where such person makes taxable supplies
of goods or services or both from any of the special
category States, he shall be liable to be registered if his
aggregate turnover in a financial year exceeds ten lakh
rupees.

20. 20
Section 7 : “Scope of Supply” (CGST Act, 2017)
supply goods & /
or services
for consideration
during the course
or furtherance of
business
sale
transfer
barter
exchange
license
rental
disposal
lease

21. 21
Activities to be treated as Supply of Goods or Services
as per Second Schedule (II) to the CGST Act 2017
Provisions under Second Schedule (II) to CGST Act 2017
regarding “Activities to be treated as Supply of Goods or
Services”, are as under:
Supply of Goods
The following shall be treated as supply of goods, namely:—
Supply of goods by any unincorporated association or body of
persons to a member thereof for cash, deferred payment or other
valuable consideration.

22. 22
Section – 2(98) : REVERSED CHARGE
Section 2(98)
 “reverse charge” means the liability to pay tax by the recipient of supply of
goods or services or both instead of the supplier of such goods or services or
both under sub-section (3) or sub-section (4) of section 9, or under sub-
section (3) or subsection (4) of section 5 of the Integrated Goods and
Services Tax Act
 Section 9(3): The government may, in the recommendation of the council,
By notification, specify categories of supply of goods or services or both ,
the tax on which shall be paid on reversed charged basis by the recipient
of such goods or services or both and all the provision of this Act shall apply
to such recipient as if he is the person liable for paying the tax in relation the
tax in relation to the supply of such goods or service or both.

23. 23
PURCHASE FROM UN- REGISTERED DEALERS
Section 2(98)
 Section 9(4): The central tax in respect of the supply of taxable goods or
services or both by a supplier, who is not registered , to a registered person shall
be paid by such person on reversed charged basis as the recipient and all the
provision of this Act shall apply to such recipient as if he is the person liable for
paying the tax in relation to the supply of such goods or services or both.

24. 24
PURCHASE FROM UN- REGISTERED DEALERS
Section 2(98)
REGISTERED PERSON
Rs 1,00,000
GST @ 12% = 12,000
UNREGISTERED
PERSON
NOTIFICATION
NO.8/2017-
CENTRAL RATE
(In Excess of Rs.
5000 Per day)
Eg: Rs. 1,00,000
CENTRAL GOVERNMENT TREASURE
Rs 1,00,000
Rs.
12000

25. 25
PURCHASE FROM - REGISTERED DEALERS
Section 2(98)
REGISTERED PERSON
Rs 1,00,000
GST @ 28% = 28,000
REGISTERED
PERSON
Eg. Rs.
1,00,000
GST
@28% 28,000
CENTRAL GOVERNMENT TREASURE
Rs. 128,000
GST
Rs. 28,000

26. Conditions for Availment of ITC by a
Registered Taxable Person – Sec 16
26
Basis - tax
invoice / debit
note issued by
a registered
supplier, or
other prescribed
taxpaying
document
Goods and/or
services have
been received*
Tax actually
paid by the
supplier to the
credit of the
appropriate
Government,
either in cash or
by utilization of
ITC
He has
furnished the
monthly return
in Form GSTR-
3 under Section
39
Note: In case of default by service provider , Tax credit will be reversed and
amount to be paid along with interest.

27. GST EXEMPTION FOR
CO-OPERATIVE HOUSING SOCIETIES
27
As per the GST Services Exemption list Serial No. 26
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
 As a trade union;
 For the provision of carrying out any activity which is
exempt from the levy of GST.
 Up to an amount of five thousand rupees 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.

28. PAYMENT OF GST IN CASE OF CO-
OPERATIVE HOUSING SOCIETIES
28
Payment of Goods and Service Tax:-
 If the billing of above charges exceeds Rs.5000 per member, per
month, goods and service tax would be payable @ 18% and recovered
in the bill. However, basic exemption is provided to any assessee for
total receipt of taxable amount of Rs. 20 Lakhs.
 Separate Account for – “Maintenance Charges “: for the purpose
Expenditure incurred for common use of its members should be
maintained.
 Amount received for common facility = Expenditure incurred for
common facility of the society
 UNUTILZED AMOUNT FOR COMMON FUND SHALL BE SUBJECT TO
GST.

29. PAYMENT OF GST IN CASE OF CO-
OPERATIVE HOUSING SOCIETIES
29
 In case of claim of exemption, Input Tax Credit cannot be availed.
 GST is payable on billing basis, i.e. even if a member does not pay
the bill amount, GST will have to be paid by the society.
 However, if the tax is collected, exemption cannot be availed.

30. KEY POINTS ON GST
30
 The co–operative housing society will have to take
registration within a month from when the taxable
supply crosses Rs.20 Lakhs billing in a financial year.
 INPUT TAX CREDIT can be availed ONLY against
TAXABLE SUPPLY on payment of Goods and Service tax
on input goods/services,
like Repairs & Maintenance, goods on GST paid used for
the purpose of business etc.

31. GST COMPLIANCES- PAYMENTS, RETURNS
RECONCILIATION OF RETURN & GST AUDIT
31
 GST is to payable on monthly basis, i. e. before filling of GST return 20th of the next
month by e –payment.
 GST returns to be filed on monthly basis in the following manner :
a) GST R1 OUTWARD SUPPLYIES 10th Of next month
b) GST R2 INWARD SUPPLIES 18th Of next month
c) GST R3 MONTHLY RETURN 20th of next month
d) GSTR-9 ANNUAL RETURN 31st December next FY
e) GST R -9A ANNUAL GST AUDIT REPORT 31st December next FY
 GST AUDITOR REPORT TO BE FILLED ALONG WITH ANNUAL RETURN.

32. EXEMPTIONS AVAILABLE TO CO-
OPERATIVE HOUSING SOCIETIES
32
 Electricity bill / Water Charges (Not fall under GST, No ITC)
 Petroleum product viz. petroleum crude, motor spirit (petrol), high
speed diesel, natural gas and aviation turbine fuel.
 Stamp Duty (outside the preview of GST)
 Muncipal Tax / Property Tax- as per the states law .
 Returnable security deposit
 Services by way of renting of residential dwelling for use as
residence. (S. no. 7 of exemption of services)
 Repayment of Loan & Interest (S. no. 8 of exemption of services)
 Services by a person by way of conduct of any religious
ceremony.(S. no. 73 of exemption of service)

33. LIABLE TO GST IN CASE OF CO-
OPERATIVE HOUSING SOCIETIES
33
 Membership fees
 Maintenance Charges [NO GST- UPTO THE AMOUNT OF EXPENDITURE
INCURRED BUT NOT EXCEEDING RS. 5000]
 Transfer fees
 Tenant Charges
 Car Parking Charges
 Charges for usage of health-clubs, swimming pools etc.
 Renting of Immovable property - {Supply- Schedule II- 5(a)}
 Sale of space for hoardings, boards, exhibition etc.
 Penalty, late fee, Interest on Defaulted Charges.
 Advance from customer.
 Repair fund (only on plant & machinery repair can claim input tax credit on payment of GST)
 Service Charges, Insurance
 Sale of forms, sale of stickers, Registration fees as non refundable woodwork etc.

34. Offences and Penalties under GST
34
Nature of Offence Prescribed Penalty
• Supplies any goods without invoice
• Issues invoice without supply of goods
• Collects tax amount but does not pay the same into the
appropriate government treasury
• Collects tax in contravention of the Act
• Fails to deduct or collect tax and also fails to pay it to the
appropriate governments
• Takes input tax credit without receipt of goods
• Obtains refund by fraud
• Manipulates financial records
• Fails to get registered
• Gives false information
• Transports taxable goods without documents
• Fails to maintain books of accounts.
• Fails to provide information and required documents.
• Takes or distributes credit in violation
• Obstructs or prevents a officer in discharge of duty
• Suppresses turnover
• Tampers or destroys evidence
• Disposes or tampers goods detailed or seized etc
Higher of following:
1. Rs. 10,000/- or
2. An amount equivalent
to the amount of tax
evaded/not
deducted/collected or
input tax credit availed
or distributed or
refund claimed in the
matter

35. Offences and Penalties
35
Nature of Offence Prescribed Penalty
• Non payment or short payment of tax or
erroneous refund or wrong availment or
utilisation of input tax credit by a registered
person
• (a) for reason other than fraud or any wilful
misstatement or suppression of facts
• (b) for reason of fraud or any wilful
misstatement or suppression of facts
(a) Higher of following:
1.Rs. 10,000/- or
2.10% of tax due
(b) Higher of the
following:
1. Rs 10,000/- or
2. Tax due
• Applicable to any person who aids or abets any
of the offences specified in clauses (i) to (xxi) of
sub-section 85(1); or
• Who acquires possession of, or deals with any
goods which he knows or has reason to believe
are liable to confiscation;
• Receives any supply of services in contravention
• Fails to appear before GST officer to honour the
summons;
• Fails to issue invoice or record it
Rs. 25,000/-

36. E: cakrishandev@gmail.com
M: 9878540755
36
THANK YOU