No GST exemption says Maharashtra Authority of Advance Ruling

No GST exemption says Maharashtra Authority of Advance Ruling

Housing society told to pay tax if the monthly contribution of residents exceeded Rs.7,500

The Maharashtra Authority of Advance Ruling (AAR) has held that no Goods and Services Tax (GST) exemption would be given to Mahindra Splendour Co-operative Housing Society, in case the contribution (of the residents) exceeded Rs.7,500. per month. And that GST would be levied on the total value of the monthly contribution collected.

The applicant, Mahindra Splendour, is a housing society whose main objects include managing, maintaining and administering its property; raising funds for achieving the said objects, by way of collecting contributions/charges from members of the society, including property tax, maintenance charges, water and electricity charges, sinking and building repair fund, clubhouse charges and interest on delayed payments.

Mahindra Splendour had sought the advance ruling on the issues of whether it was liable to pay GST on the contribution received from its members, If yes, whether the applicant could avail the benefit of exemption for the value up to Rs.7,500 per month per member. And, in case, the monthly contribution exceeded Rs.7,500 per month, then GST should be levied only on differential value in excess of the said amount.

The Coram of Rajiv Magoo and T R Ramnani held that the applicant was liable to pay GST on the contribution received from its members. In case, the monthly contribution exceeded Rs. 7,500, GST would be levied on the entire value of the monthly contribution collected.

The charges, collected by the society on account of property tax, electricity charges and other statutory levies would only be excluded while calculating the threshold limit of the said amount, the Coram said.