GST UPDATE ON ''SOCIETY CHARGES" COLLECTED BY BUILDER

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* Run-up to Budget: Monetary threshold for GST offences may rise to Rs 25 cr * GST (Tax) E-invoice Must For Businesses With Over Rs 5 Crore Annual Turnover * Both Central GST and excise duty can be imposed on tobacco, rules Karnataka high court * CBIC Issues Clarification On Extended Timelines For GST Compliance * CBIC Issues Clarification On Extended Timelines For GST Compliance * Budget 2023- 9.6 crore gas connections * GST: Tamil Nadu Issues Instructions for Assessment and Adjudication Proceedings * GST: CBIC Extends Last Date for filing of ITC * GST collection in September surpasses Rs 1.4 lakh crore for straight seventh time * Dollar smuggling case: Customs chargesheet names M Sivasankar as key conspirator. * Hike in GST rates fuels inflation * Assam: CBI arrests GST commissioner in Guwahati * GST fraud worth ?824cr by 15 insurance Cos detected * India proposes 15% customs duties on 22 items imported from UK * Decriminalising certain offences under GST on cards * Surge in GST collections more due to higher inflation: India Ratings * MNRE Notifies BCD and Hike in GST Rates as ‘Change in Law’ Events But With a Condition | Mercom India * Solar projects awarded before customs duty change allowed cost pass-through * Rajasthan High Court Dismisses Writ Petitions Challenging Levy Of GST On Royalty * GST revenue in September likely at Rs 1.45 lakh crore * Govt working on decriminalising certain offences under GST, lower compounding charge * Building an institution like GST Council takes time, trashing is easy: Sitharaman * GST collections in Sept may touch ?1.5 lakh crore * KTR asks Centre to withdraw GST on handlooms * After Gameskraft, More Online Gaming Startups To Receive GST Tax Claims * Madras HC: AAR Application Filed Under VAT Does Not Survive After GST Enactment * Threshold for criminal offences under GST law may be raised * Bengaluru: Gaming company faces biggest GST notice of Rs 21,000 crore * CBIC clarifies Classification of Cranes for GST, Customs Duty * Customs seize gold hidden in bicycle in Kerala airport

SOY P ITTY on 21 Apr, 2016 wrote:

YOU SIR IS A GREAT PERSON TO SERVE WITH OUT ANY SINGLE PENY. AND YOUR ADVICE RELATED EXCISE AND SERVICE TAX IS VERY VALUABLE FOR GRADUATE/POST GRADUA ...
hitesh on 03 Apr, 2016 wrote:

THANK U SIR 4 UR REPLY ON RATE OF INTEREST
hitesh on 20 Mar, 2016 wrote:

Thank u sir for ur reply regarding ssi exemption limit.
visuiyer on 09 Mar, 2016 wrote:

the budget analysis is really superb... and has highlighted all the aspects.. Hats off Sir ji..
hitesh on 06 Mar, 2016 wrote:

THANK U SIR FOR YOUR REPLY REGARDING THE TARIFFS I ASKED
hitesh on 29 Feb, 2016 wrote:

THANK U SIR FOR GUIDING ME IN THE QUERY OF REFUND.I M THANKFULL TO U.
Abhimanyu Singh on 08 Feb, 2016 wrote:

GST should be passed in this budget. all parties should help in public benefit. Opposition of the party in this regard is not good.
CA R P Vijay on 04 Jan, 2016 wrote:

Thanks and we also wish you and your family a very happy and prosperous new year.
Rahul Singhvi on 04 Jan, 2016 wrote:

Thank you for your lovely greetings ! Wishing you & your family a very happy & fun filled New Year
O V Srinivasan on 04 Jan, 2016 wrote:

We from Gokak Textiles limited wish you and your team a very happy and prosperous New Year 2016.

GST UPDATE ON ''SOCIETY CHARGES" COLLECTED BY BUILDER

GST UPDATE ON ''SOCIETY CHARGES" COLLECTED BY BUILDER

GST Update on "Society Charges" collected by builder:-

A builder is supposed to collect an amount for repairs and maintenance of flats. This collection is being kept in a separate account dedicated for the purpose. Until the residential housing society is formed, the expenses for repairs and maintenance of flats are borne out of this account. Once the society is formed, this account is being transferred to the society. This issue has been under litigation in service tax regime.

In our earlier update, we had opined in the same case that since no consideration is involved and builder is merely acting as a collector of amount which is subsequently transferred to society, no tax shall be payable on the same in GST regime. However, on twitter government released FAQs yesterday wherein this issue had been answered as follows:-

Q: Our society’s developer is charging GST on maintenance bills which is less than Rs. 2000/M. Is it applicable?

A: Yes.

According to this FAQ, GST is applicable even if the builder or developer collects the maintenance charges as benefactor for the society, however, no reason or any legal backing has been provided alongwith this.

Earlier in service tax regime, this issue was under litigation for a number of times wherein it was held there is no need to pay the tax on these society charges collected by builder on behalf of society. Some of such decisions are cited as follows:-

· KUMAR BEHERAY RATHI Versus COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2014 (34) S.T.R. 139 (Tri. - Mumbai)]

· Omega Associates Vs CST[2013-TIOL-1149-CESTAT-MUM]

As the FAQ answer as discussed above is against the ratio laid down in these decisions; it is going to ignite the issue again. However, it is worthwhile to mention here that since the FAQs don't have legal backing and also it does not discuss any reason of answer, it cannot be considered as a strong evidence to support the case of department. However, it will definitely give new heights to the litigation already prevailing on this issue.

You can reach us at www.capradeepjain.com, at our facebook page on https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/as well as follow us on Twitter at https://www.twitter.com/@capradeepjain21

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