Property tax, electricity charges etc. to be excluded for calculating exemption limit of Rs. 7,500 by housing society: AAR

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  • Last Updated on 21 February, 2022

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Club or association - Member's contribution - Maintenance Charges paid to housing society - Tax liability

Case Details: Authority for Advance Rulings, Maharashtra Mahindra Splendour CHS Ltd., In Re - [2022] 135 taxmann.com 71 (AAR - MAHARASHTRA)

Judiciary and Counsel Details

    • Rajiv Magoo and T.R. Ramnani, Member

Facts of the Case

The applicant was a housing society whose main objects were managing, maintaining and administering its property; raising funds for achieving the said objects etc., by way of collecting contributions/charges from members of the society, like Property taxes, Maintenance charges, Water and electricity charges etc. It filed an application for advance ruling to determine taxability of amount collected under GST.

AAR Held

The Authority for Advance Ruling observed that the applicant society and its members are distinct persons and the various charges received by the applicant from its members are nothing but consideration received for supply of goods/services as a separate entity. The exemption as per the entry No. 77 of the Notification No. 12/2017 CT (R) would be available only when a member’s contribution per month is up to an amount of Rs. 7,500. A member, who shall contribute an amount which is more than Rs. 7,500, would not be eligible for the exemption under entry No. 77 and the entire contribution amount would be liable to be taxed. However, the charges collected by society on account of property tax, electricity charges and other statutory levies would be excluded while calculating the exemption limit of Rs. 7,500.

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