Electricity Charges Recovered by Housing Societies From Their MembersLevy of GSTVishambhar Dayal

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The Tax Publishers GST--Housing Societies Electricity Charges Recovered by Housing Societies From Their Members--Levy of GST Vishambhar Dayal The learned author seeks to analyse the issue as to whether electricity charges recovered by Housing Societies and paid to the electricity supplier company are includible in the taxable value for levy of GST. 1. Levy of GST on Resident Welfare Society As per clause (a) of sub-section (1) of section 7, "supply" includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. The term "business" is defined under clause (17) of section 2 of the Act, according to clause (e) of which, "business" includes 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. The Finance Act, 2021 has inserted clause (aa) under sub-section (1) of section 7 of the Act, w.r.e.f. 1-7-2017 so as to provide that the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration, shall be regarded as supply. For the purpose of the above clause, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Housing Societies

Electricity Charges Recovered by Housing Societies From Their Members--Levy of GST

Vishambhar Dayal

The learned author seeks to analyse the issue as to whether electricity charges recovered by Housing Societies and paid to the electricity supplier company are includible in the taxable value for levy of GST.

1. Levy of GST on Resident Welfare Society

As per clause (a) of sub-section (1) of section 7, "supply" includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.

The term "business" is defined under clause (17) of section 2 of the Act, according to clause (e) of which, "business" includes 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.

The Finance Act, 2021 has inserted clause (aa) under sub-section (1) of section 7 of the Act, w.r.e.f. 1-7-2017 so as to provide that the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration, shall be regarded as supply.

For the purpose of the above clause, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another.