The Maharashtra Authority of Advance Ruling (AAR) ruled that the GST is applicable on the Repair and Maintenance Fund and Sinking Fund.

The applicant, Forest County Housing Co-operative society is an unincorporated body and a non-profit entity registered under THE MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960. It is registered under GST since the aggregate turnover is more than 20 lakhs. It collects Maintenance charges from its members on a quarterly basis for providing services and goods for the common use of its members. The monthly bill (including Repair and Maintenance fund and Sinking Fund) is less than Rs. 7500/- per month per member.

The applicant has sought the advance ruling on the issue of Applicability of GST on Repair and maintenance fund and sinking fund and whether or not exemption Limit of Rs.7500/- per member is applicable on above two components of maintenance bill by the housing co-operative Society to members of society.

The Applicant is of the view that having obtained registration does not mean that the housing society has to compulsorily charge GST in the monthly maintenance bills raised on its members and have cited the provisions of Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017, which, at Sr. No.77 provides for the following exemption to housing societies.

The two-member bench of Rajiv Mangoo and T.R.Ramnani ruled that GST is applicable on Repair and Maintenance Fund and Sinking Fund and if the gross amounts collected by the applicant in their bills/invoices, exceed Rs.7500/- then exemption limit of 7500 is not applicable on two components of maintenance bills.

“On the perusal of the above-said sample quarterly bills and its details, if the total value of charges exceeds the limit of Rs. 7500/- per member per month, then the total value of the amount in the said bill would be held as taxable to levy GST thereon and GST would be applicable @18%,” the AAR said.